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Finance minister Arun Jaitley, after presenting his maiden Budget, said more measures, including on reviving SEZs, are in the offing. In an interaction with FE’s Arup Roychoudhury and Arun S, Jaitley said he would like to see the Insurance Laws (Amendment) Bill passed by Parliament with foreign investment at 49% and without capping the foreign partner’s voting rights. Edited excerpts:
Your predecessor used expenditure compression to meet the fiscal deficit target. How will you manage to meet the 4.1% target?
To tackle fiscal deficit, you should spend less or earn more. The ideal situation is that you should earn more. If you spend less, you are contracting expenditure and you will end up contracting some parts of the economy. I have looked at the unresolved issues and the problems that the previous government left behind. In 45 days, I have tried to address most of them.
What happens with pending issues on retrospective taxation?
There are four clear issues which come out here. Does Parliament have the jurisdiction to legislate retrospectively? It has and I won’t curtail that jurisdiction. Secondly, will this government rely on retrospective tax legislation? No. Ordinarily, we will not retrospectively legislate to create fresh liability, which actually means that if some old taxes are being collected for the last 40 years and some technical problem arises, you can correct that. But we will not create new liabilities with effect from a back date. Thirdly, if the 2012 amendment remains, are fresh notices going to be issued under those amendments? Assessing officers will not issue them. They will report the matter to CBDT, which will have a permanent mechanism to look into it. Lastly, what happens to the past cases? They are pending in courts and other tribunals. We will wait for the judgment and legal process can resolve those cases.
Why was gold import duty not cut despite the current account deficit being under control compared with the last fiscal?
On CAD, revenue deficit and fiscal deficit, we have to be very cautious. We are not taking any such decision now.
You have hiked the foreign investment cap in insurance to 49% despite the BJP being against it earlier. When you table the Bill in Parliament, will you cap the foreign partner’s voting rights at 26%?
What I have announced reflects the government’s policy and the party will support it. The issue on voting rights will have to go