Asserting that government has no qualms about being pro-business, finance minister Arun Jaitley on Friday spelt out a road map for economic recovery by bringing civility in tax regime, maintaining low rates, rationalising subsidy system and boosting infrastructure and housing.
Replying to the general debate on the Budget for 2014-15 in Lok Sabha, he asserted that being pro-business was necessary for generating more revenues and increasing spending that would benefit the poor and marginalised sections of the society through social sector programmes.
He blamed the “policy paralysis” and retro tax amendment of the previous UPA regime for the current economic woes and promised to take a series of steps besides the budgetary provisions for sustainable growth amid indications of some recovery.
The first stage consideration of the Budget was completed on Friday with the Lok Sabha approving it. Now, the second stage consideration will involve discussion on demands for grants followed by the approval of the Finance Bill.
Justifying the provisions in the Budget aimed at attracting private investments, including FDI in various sectors like defence and insurance, the finance minister said these were necessary to boost the industry and manufacturing within the country that would lead to 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 said.
Jaitley said he preferred low taxes to encourage economic activity. “If you put higher taxes on products, people will buy products from outside. Lower taxes will increase economic activities,” he said. He noted that investors over the last few years had developed “doubts” over the India story in the backdrop of unpredictable tax regime.
“There are a series of steps that we have to take. The budget was only some of those steps. It was directional. It only shows direction. There will be many steps which will be taken outside the budget. It is not necessary that everything is announced in the budget,” he said.