Finance Minister Arun Jaitley has hinted at not raising tax rates and providing incentives for manufacturing in the coming Budget while asserting that ‘structural changes’ will have to be made to get the economy to 8-9 per cent growth.
Hard selling India to global investors at the World Economic Forum here, he also promised a stable tax regime that would not come up with unreasonable demand and change taxes retrospectively.
“In terms of incentivising manufacturing, it is very much on our agenda. Even though we had few days during the last Budget we did give to the Ministry of Micro Small and Medium Enterprises (MSME), the National Investment and Manufacturing zone (NIMZ) and so on because we wanted the sector to pick up, and that priority is fairly high on our agenda,” he said speaking at a session on ‘India’s next decade’
While referring to the various revenue sources for the government, including divestment, dividend and spectrum sale, the Finance Minister said as economic activity picked up, the government’s capacity to raise revenue would also increase.
“I am not in favour of raising the rates of taxation as that could become counter-productive,” he told reporters late on Thursday.Mr. Jaitley expressed confidence that India was close to the point when investment would pick up as there were a large number of investors, who were waiting to come in.
“They only want to be doubly sure about the credibility of the decision making process and the stability of the policies,” he said.
Speaking at the session, Mr. Jaitley said there was need to take a series of reforms as the last ten years got lost out because of unnecessary debates.
“Now that opportunity has come back to us. Slowly we (BJP) are moving in the direction of having a good figure in the Upper House (Rajya Sabha). The pro-reforms (groups) have won everywhere,” he said.
The slumping oil prices were another factor that was going in India’s favour.
Also many economies in the world, which were competing with India, were not doing well.
“It is really possible for us to go back to the original capacity of high growth rate. As far as taxation is concerned, the global community and Indian tax payers want to be convinced that there will be a stable tax regime,’’ he said.
To a question on whether it will be a ‘Big Bang’ budget next month, he said he would not be swayed by such phrases used in television studios. If the sum total of all the steps the government had taken was taken into account, it would be much more than the Big Bang.
“The budget will be an important occasion for the government, but then the next 364 days are equally important.
