With India poised to overtake China’s growth rate in 2015-16, the government on Tuesday urged the Opposition not to be “obstructionist” and facilitate in getting a number of key bills passed.
“This is a historic opportunity where India has real chance of growing…the world also sees India as a bright spot. We must use this opportunity,..I appeal with folded hands... let politics of obstructionsim not go to next stage,” finance minister Arun Jaitley said while replying to a debate on the Appropriation Bill in the Lok Sabha.
The bill was later passed by a voice vote, thus completing the first phase of the budgetary exercise in the lower house.
Denying charges that the government was pro-rich as it had proposed to reduce the corporate tax rate from 30% to 25%, Jaitley said he had borrowed the idea from the Direct Taxes Code prepared by former finance minister P Chidambaram.
The move was necessary to create a competitive climate in the country and encourage investors, he added. “I must confess this was not my original idea… I borrowed it from the UPA. I said it is good idea because in rest of world, it is 21%… but when I bring it, the Congress says it is pro-corporate.
“Who will invest in India if tax is 30%?”
Jaitley pointed out that even though the tax rate was 30%, the actual realisation worked out to be only 23% due to several concessions enjoyed by companies over the years.
India’s current account deficit (CAD) — the difference between inflows and outflows of a foreign currency — will “hopefully” be less than 1% of GDP in 2015-16, he said.
The deficit narrowed to 1.6% during the October-December quarter from 2% a quarter earlier due to slumping oil prices.
Replying to remarks that nothing was offered to the middle class, Jaitley said the NDA government has given exemptions of about Rs 1,70,000 in the last two budgets. He pointed out that tax exemption has also been provided for investments of up to Rs 50,000 in pension products. “Effort is to transform pensionless society into pensioned society.”
The additional surcharge of 2% on the super rich was expected to fetch an extra Rs 9,000 crore anually, he added.
On the issue of consumers not getting the full benefit of the fall in global crude oil prices, the finance minister said that even as petroleum prices were reduced 11 times, the entire benefit could not be passed on to consumers as oil firms, which are already reeling under losses of about Rs 30,000 crore, cannot be allowed to “die.”
Justifying the government’s efforts to open up more sectors for foreign investment, Jaitley said more funds are required to create jobs, develop infrastructure and implement social welfare programmes.
The government would bring a new legislation on black money in the current session of Parliament, which would include provisions like 300% penalty and punishment up to 10 years for concealing overseas assets, he added.
The finance minister also rejected concerns that states would lose their share in devolution of taxes following implementation of the recommendations of the 14th Finance Commission, saying it was not possible as the overall outgo towards states would increase by as much as Rs 1.86 lakh crore in 2015-16.