FM Arun Jaitley today blamed the "policy paralysis" and retrospective 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.
Arun Jaitley spelt out his intentions to bring about "civility" in tax regime, rationalise the subsidy system, maintain low taxes and boost infrastructure and housing to expand economy while providing more for social sector programmes.
Replying to the debate on the General Budget in the Lok Sabha, he said the government had no qualms about being "pro-business", asserting that it was necessary for generating more revenues and increasing spending that would benefit the poor and marginalised sections of the society.
The Union Budget 2014 was later approved by the House.
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 while noting 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.
The minister also expressed the hope that interest will soften with moderation in inflation. "Interest rates have gone up because inflation is high. I hope interest rate comes down (with decline in inflation)", he added.
Jaitley sid there has been a marginal improvement in various economic parameters like exports, capital inflows and industrial sector as per the recent data.
He said this could not be termed as a "trend" but early signs of recovery.
Modest improvement in growth rate is likely in the current fiscal, he said, adding an increase in economic expansion of 7-8 per cent and subsequent buoyancy in tax collection would be help him allocate more resources for social sector schemes.
Jaitley said he preferred low taxes to encourage economic activity. "If you