The NDA government has no qualms about being pro-business, according to finance minister Arun Jaitley who also made it clear that despite being in the statutes the retrospective tax measures will not be applied.
One of his officers on condition of anonymity said the government is willing to give more leeway on retrospective tax than the Budget makes out. The officer said with a change at the top in the revenue department, midway during the Budget, it was impossible to frame the necessary amendments in time for the speech but those will be sorted out.
Summing up the first stage of the debate on Budget 2014-15, the minister said in Lok Sabha that being pro-business was essential to mop up resources for social welfare programmes. He also said there will be more announcements from the government beyond the Budget speech, adding that he wanted to reach a stage where buying of a house would become easier than taking it on rent.
“There are a series of steps that we have to take. The Budget was only some of those steps. It only shows the direction. It is not necessary that everything is announced in (it),” he said.
The minister also said the improvements in export and manufacturing data did not establish any trend but could be read as early signs of recovery. He agreed with the members that inflation was high and so were interest rates. “Interest rates have gone up because inflation is high. I hope interest rate comes down,” he added.
On the charges of favouring business, he blamed the previous UPA government for moving to an extreme position by creating a policy paralysis and promised to take a series of steps besides the budgetary provisions for sustainable growth.
Jaitley said measures like raising of the foreign direct investment cap in defence and insurance were essential to boost industry and manufacturing within the country with the concomitant positive impact on job creation.
“The government is trying to restore confidence of domestic and foreign investors by bringing civility in taxation system and remove the perception of tax terrorism,” he noted in his reply.
“If you put higher taxes on products, people will buy products from outside. Lower taxes will increase economic activities,” he said.
The House completed the first stage consideration of the Budget on Friday and will now move to the second stage that involves discussion on demands for grants followed