Black money holders will be dealt with strongly; economy to grow at 8%: FM Jaitley
Finance Minister Arun Jaitley feels that it is a golden opportunity for India to tap its potential and register good economic growth since the rest of the world is growing at a slower pace.
In an exclusive interview with Zee Business Editor Amish Devgan, Finance Minister Arun Jaitley speaks candidly about GST, company regulations, black money and land bill.
How has the first year of Modi government been?
When we formed the government, our country stood nowhere in the eyes of both local and international investors. It had completely fallen off the radar. Our first challenge was to make the economic status credible and gain credibility in the decision-making process.
Our first priority was to ensure capital to promote industries and infrastructure, and help the poor. We stopped our people from investing abroad. Today when others’ pace is slower, India is growing at eight percent. The same people who doubted India are now counting on it to accelerate the growth of other BRICS countries.
I would also like to implement ease of doing business along with promoting investment. I don’t want investors to face any hassles while setting up a project. The work is in progress. There are two reasons for the negative image of our country. First is the taxation arrangement. There were too many taxes and they were hostile which discouraged investors. I have tried to make the regime non-adversarial. Second, I would try to pass the GST in the next session. It’s going to be the most radical tax reform post independence according to me.
I want to pass an amendment to the Constitution this time following which three more laws will be implemented. We have set April 01, 2016 as the target. There will just be one tax. Multiple taxation will be done away with. As of now, most governing bodies are on our side. It will help in GDP growth and seamless travel of goods. ASEAN countries have a corporate tax of 21-21.5 percent, some have made it 15 percent, and ours is 34 percent, but due to exemptions, it comes down to 23 percent. I asked the corporate tax to be 25 percent. It is internationally compatible and comparable. The fourth major reform which we made in the last one year is to auction things like spectrum, mines etc to bring transparency. And I would give the credit to Prime Minister Narendra Modi. The journey is still not over. It will take two-three years to bring about changes.
Moody’s and Fitch have increased India’s ratings. Do you think it is a positive sign?
We were headed towards junk. They made us stable. Moody’s made it positive from stable. But I am still not satisfied.
The Opposition says that both Modi and Mausam are betraying the farmers.
We have increased compensation to farmers by 1.5 times as compared to the Congress-led UPA government. The Congress government would not give compensation to farmers until they incurred a loss of 50 percent or more. However, we have reduced the ceiling to 33 percent. If economy improves, the government will give higher compensation to them.Do you think it is an attempt to spoil the government’s image by calling you corporate friendly?
We are not corporate friendly. We’re taking money for spectrum and other things. Earlier, it was being given for free or at throw-away prices. Who was corporate friendly then? Improving economy of a country improves the state of common man as it helps in generating employment. If you see from the poor man’s perspective, we have opened 14 crore bank accounts. We also initiated the process of depositing money in those accounts. And under the social security scheme, we plan to give the poor an insurance worth Rs 2 lakh for a premium of just Rs 12 annually. We have started pension scheme. We are also working on a composite health scheme. It is our duty to serve the poor.
Congress plans to re-launch Rahul Gandhi with the Land Bill. What is is your take?
They have always worked on deteriorating the image of the country and discouraged investors. We came to power after the previous government ruined everything. And today, Modi ji has erased the concept of corruption from this country. There has been no allegation on any minister, government decision or transactions in the last 12 months. On the contrary, UPA was full of scams and scandals. How can they launch anyone after all these comparisons?
You had said India is not a tax haven. Please elaborate.
I want India’s tax provision to be non-adversarial. Some people took us for granted and thought they will get all the taxes waived off if they pressurise us. Therefore, I had said that we are not a tax haven. The UPA had levied a tax during Pranab Mukherjee’s time, which was not welcomed by foreign investors. I ended it from 01 April, 2015 onwards. Taxes which are payable will be recovered. Anybody can raise their grievances about taxes which are not payable.
During the election campaign, you said there shouldn’t be any tax terrorism in the country. Do you think in the last one year, tax terrorism has reduced?
We decided not to levy retrospective tax with regard to the previous government. But the old proceedings need to be resolved in court. It is not possible to scrap old notices and rules. I will accept the rulings whatsoever they are.
It has been said that some investors are getting a MAT notice. Would you like to say something about that?
Notices are being sent because of the old laws and cases, which people have lost and that is why we are asking them to pay.
There’s still a lot of confusion about GAAR. What would you like to say?
We are still in the process. I don’t want to talk about it right now. GAAR has been enforced in all the developed countries. We have deferred it because the condition here today is slightly different. That is why I have decided to delay it till 2017.
Several experts say that there should be a bank linkage with the Sukanya Samridhi Yojna started by you. What do you think?
Today, this is the scheme which gives highest interest rate in the small savings category. It is a good suggestion and we will consider it.
The Opposition keeps bringing up the topic of black money. What would you like to say about that?
There is a lot of black money within and outside the country. Has anyone been able to do it in the last 68 years what I have recently announced in this Budget? We have asked people to disclose foreign assets and accounts, and also pay penalty for the same. There will be a criminal case against black money holders and they may be also punished for 10 years in case they fail to abide by the law. For domestic transaction of over Rs 1 lakh, we have also made it mandatory for people to give their PAN number.
You said that the Opposition is trying to put the government on the back foot on the issue of black money?
They don’t have a clue about economy. The rules which we have enforced will make dealing with black money very difficult.
The industry is worried that you don’t have many seats in the Rajya Sabha. What do you think?
We have got four ordinances. Three were passed, and the fourth one will also get passed. You can delay or defer them but can’t stop them. So, even if the Opposition is into its own politics, the country won’t stop functioning because of it.
But sometimes your party members also fuel all this. What do you have to say on that?
I completely accept it. PM Modi wants to make India a very strong nation. It is not good to give such careless statements because they tarnish the image of government as well as the good work that we do. It doesn’t affect our governance but we just find it very irresponsible. So it is better that the agenda given by the PM should be allowed to move ahead. That will strengthen the country and is also good for our party.
Will the government be able to bring back black money?
The HSBC accounts have existed from 2006-07. People have not parked their money in those accounts now. So, we have devised this rule where they have to pay tax on it as well as penalty. And after this if the account holders are found to be depositing further, an equivalent amount of asset will be seized. So we’ve made provisions for both.
PM Modi said that this government is dedicated to the poor. But the standing crops this time has been ruined by rains. What would you say as the Finance Minister?
We have appointed senior ministers in every state to visit the affected areas. We are examining the proposals made by the state governments. The PM has declared the criteria and quantum of compensation for the affected farmers. We will take more steps once we get more concrete proposals.
Will the Land Bill be passed in the next session?
We will try to convince the Opposition. I’m sure the Bill will come into existence.
Last year, the target of divestment was reduced. What do you think?
As per our expenditure and revenues, we have been able to garner around Rs 38-39,000 crore from divestment and it was sufficient for us. This year, we will divest government’s stake in 20-22 PSUs, the process for which has already begun. We have done the first disinvestment of this fiscal and have received an overwhelming response. We will try to attain the target this year.
Will government launch an investigation into the Moin Qureshi case which was exposed by Zee Media?
I don’t comment on individual cases. But we are giving full autonomy and power to agencies like Enforcement Directorate to investigate such matters. The government would take it to a logical end.
How do you see the coming year as the Finance Minister?
The first year was full of excitement and expectations. In the second phase, the process that we initiated will be implemented. The time after the first year is the ‘slog period’ in which we have to execute laws and rules. India would register fastest economic growth and I can see it happening.
What are your expectations from the Bihar elections after the defeat in Delhi?
Delhi election was really a setback. But it is okay to lose one or two polls. It is a part of politics. We will try our best to win in Bihar.
You started the Mudra Bank. What would you like to say about it?
We are devising a way to fund those people who were unfunded. It is for the self-employed entrepreneurs that includes the poor, dalits, backward people and minorities. Such people can now get funds and provide employment further to people as well.