World needs ‘additional shoulders’ to push economic growth: Jaitley | business | Hindustan Times
Today in New Delhi, India
May 26, 2017-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

World needs ‘additional shoulders’ to push economic growth: Jaitley

Finance minister Arun Jaitley has said that the world needs “additional shoulders” other than China to push economic growth and this presents an opportunity for India.

business Updated: Oct 06, 2015 16:22 IST
Arun Jaitley

New York

Finance minister Arun Jaitley has said that the world needs “additional shoulders” other than China to push economic growth and this presents an opportunity for India.

Addressing students and faculty at Columbia University in New York on Monday, Jaitley said the revolution of raising expectations in India is a good sign.

Jaitley reiterated that India has now reached a situation where it is no longer satisfied with a 6 to 8% growth rate and most Indians believe that “my normal is eight plus (growth rate), probably closer to nine per cent” and higher.

“I see nothing wrong in the pressures being built on the decision makers that the faster you move the better it is for the government,” he said, adding that being placed in such a situation is an opportunity for India.

“One of the great shoulders the world was relying on (was) China. The world now needs some other additional shoulders to give a push to the growth rates. “It is a great opportunity and if we continue to move in the direction in which we are, I see over the next few years with a more friendly environment in the world as far as the economic scenario is concerned, probably our growth rates will move up, our ability to grow will move up and our ability to fight poverty at least will also improve,” he said.

Jaitley delivered the keynote address at the inauguration of the Deepak and Neera Raj Centre on Indian Economic Policies at Columbia University’s School of International and Public Affairs.

Noting that India grew by about 7.3% last year, Jaitley said that according to internal estimates, this year “we could do a shade better than that.”

He said that one of the main problems of credibility related to taxation issues. “As far as the taxation issues are concerned, a lot needed to be done at our end and therefore in terms of direct taxes, we’d lost credibility with the world,” he said, adding that aggressive taxation did the country no good and does not bring taxes but it “brought us a bad name”.

“For anyone in the government, it would be a very serious challenge where assessment orders have been passed, can only be set aside by a judicial process and not by an executive decision,” he said, adding that to resolve each one of these issues has been one of his toughest challenges. He, however, expressed satisfaction that one by one each of those issues related to direct taxes is now being put to rest.

In addition to this, Jaitley said the government has already announced in the budget that it is seriously looking at some category of transactions making PAN card compulsory over a particular threshold limit.

“As far as corporate taxes are concerned, once corporate tax rates go down the exemptions will have to be phased out,” he said.

“These are those corporate exemptions which people get... Bulk of the litigation and discretion is around those exemptions,” he added.

He is also looking to put most of the exemptions, except those which encourage individual savings, to an end. Starting with 2016-17 year, the corporate tax rate will be brought down to a 25% flat corporate tax.

“Over the next four years this entire rate would come down to 25%. And I will be removing each one of those exemptions one by one. I am shortly going to notify all the exemptions which are going to be rationalised this very year itself,” he said.

Jaitley said that one of the main problems is of credibility related to taxation issues. “As far as the taxation issues are concerned, a lot needed to be done at our end and therefore in terms of direct taxes, we’d lost credibility with the world,” he said.

Aggressive taxation did the country no good and does not bring taxes but it “brought us a bad name”, he said. “For anyone in the government, it would be a very serious challenge where assessment orders have been passed can only be set aside by a judicial process and not by an executive decision,” he said, adding that to resolve each one of these issues has been one of his toughest challenges.

He, however, expressed satisfaction that one by one each of those issues related to direct taxes is now being put to rest.

Jaitley said the government is “keeping all options open” to resolve the taxation issues either by judicial or executive process.

“I think the fears of retroactive taxation... by and large have been put to rest,” he said. On growth, he said the revolution of raising expectations in India is a good sign.