Union Finance Minister Pranab Mukherjee said here on Sunday that there was no ‘policy paralysis' during the rule of the UPA-II government
Participating in an interactive session organised by the Bengal Chamber of Commerce & Industry on the Union budget, he said that in recent times, policy initiatives like the New Manufacturing Policy were announced.
The government had taken steps to ensure the availability of fuel for the power sector and give environmental clearance to seven of the 10 mega power projects. The Lok Pal Bill had been cleared by the Lok Sabha, he pointed out.
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Not living in cocoon
Mr. Mukherjee, however, said: “My mandate is to carry people with me and as a Finance Minister, I cannot ignore ground realities. We are not living in a cocoon or in an isolated world.”
Referring to the lack of a clear mandate through the seven parliamentary elections since 1989, he said the same electorate were giving clear mandates in provincial elections but not so for a government at the Centre.
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“No short cuts”
Passing new laws had become time-consuming and strenuous; the Finance Minister noted adding that while there was no policy paralysis, there were “no short cuts” either.
He admitted that “divergent political views within the coalition government and outside” had led to delays in rolling out the Goods and Service Tax and the Direct Tax Code as well as the clearance of the Insurance Amendment Act, the Pension Fund Regulatory Act and the Amendments to the Banking Act.
Subsidies
Asked whether a fractured mandate would allow him to fulfil his target of lowering subsidies as stated in the budget, he said: “We will have to do it. My experience is that when there is a crisis that is going to affect the country, the political establishment can come together. This has happened before.”
He said that “collectively we have to take the decision … what do you do if petroleum and crude prices soar… How do you pay for that?”
Mr. Mukherjee said that in the last 10 months, India spent $ 46 billion on gold imports. He said this in the context of the custom duty hike on gold and the increase in excise duty on jewellery which has drawn protests. He promised that he would look into the excise duty issue at “an appropriate time.”
On the contentious issue of giving retrospective legislation in the area of income tax, and its effect on flow of overseas investments, he said there were precedents on this and the move was aimed not only at earning extra revenue but also to prevent outflow from exchequer.
“Retrospective legislation in income tax areas is not uncommon, it has happened,” he reiterated, allaying fears that no case could be reopened beyond six years. “Cases already assessed cannot be reopened,” he said.