Finance minister Arun Jaitley, who presented his first Union Budget on Thursday, said he carefully examined every issue in the 45 days the new government has been in power to ensure he addressed any unresolved problems. "I have not indulged in any form of criticism of the former government I have looked at the unresolved issue and problems and I have tried to address these problems," he said in an interview. Excerpts:
Union finance minister Arun Jaitley (C) poses with members of his team for a group photograph on the eve of the presentation of the the Annual Budget 2014-15 in Parliament (AFP Photo)
On the retrospective tax issue and the Vodafone case:
I have tried to look into all the unresolved problems that were left by the previous government and I have tried to address each of them. Now, with regard to retrospective tax issue there are a few questions. First, does the Indian Parliament have the jurisdiction to come out with such a tax structure? The answer is yes; now I cannot change that. The second question is whether this government will rely on the retrospective tax. The answer is no. We will not create any fresh liability based on the retrospective tax structure. Now the third question is what happens to the fresh cases arising out of the 2012 amendment of the IT Act? Assessing officials will no longer deal with these cases. They will have to report to CBDT and a high level committee constituted by the CBDT will look into them. A few cases are pending in different courts and legal fora. These cases are at a different stage of pendency and these will naturally reach their logical conclusion. On the Vodafone issue, we would rather wait for the court verdict.
On his proposal to hike the foreign direct investment (FDI) limit in insurance:
Well, we will take it up soon, now exactly when, that we will see. My proposal is to hike the FDI limit without any rider (earlier there were talks of restricting the voting rights).
On the introduction of the goods and services tax (GST):
There are two issues. States want compensation and their stand is reasonable. The question is how fast can I mobilise resources for the same. I hope to do so during the course of the year. States have also demanded that a few items be kept outside the purview of the GST. So we will see, whether you get an ideal GST or a good GST.
On the consolidation of government banks and whether the finance ministry will play a role in the process:
We believe consolidation is good and ideally big banks and small banks must come together. I intend giving them lot more autonomy. They can also raise resources from the market. Now if the government holding in a public sector bank is 70%, it can be brought down to 55% but I not going to get it below 51%. Retail investors can participate in the process and hold shares directly. The government will continue to hold a majority shareholding.
On reduction in oil subsidy and the Iraq crisis:
We'll look into the issue at the end of the year and let us pray that the situation in Iraq does not get worse.
On interest rates and the role of the Reserve Bank of India:
The call will be taken by the RBI,that will depend on whether inflation moderates. If that happens(inflation eases and interest rates ease), obviously we will be very pleased.
On reduction of gold import duty:
If our (current account deficit) situation gives more comfort level, we will review it. These policies can be reviewed anytime.
On global rating agencies' expectations of a clear roadmap:
In 45 days, you cannot expect a very clear roadmap. Taking important steps which were not taken in the last 10 years was critical like simplification of tax. In 45 days, we have tried to address each one of them.