NEW DELHI(PTI): India has the potential to make nine to 10 per cent growth rate…
NEW DELHI(PTI): Finance Minister Arun Jaitley on Tuesday pushed for early passage of the GST bill which is stuck in Rajya Sabha, saying India has the opportunity to touch 9% growth and appealed to Congress to think about the “legacy” it would leave behind by not supporting the measure.
He said a message should not go to the world that Parliament is being an “obstruction” to the reform process as he noted India is being seen as a “bright spot” when other major economies have slowed down.
“It not difficult for India to grow at 8-9%. It is not impossible,” Jaitley said in the Lok Sabha while replying to a debate on the second batch of Supplementary Demand for Grants of Rs 56,256 crore which was later approved.
He said the best solution to poverty eradication is enabling the country to grow faster which will generate jobs and increase resources of the government.
“Those who try to create impediments want to poverty to perpetuate…. By short-sighted vision, we end up hurting the poor in this country,” the Finance Minister said.
He said GST (Goods and Services Tax) bill, which aims at reforming the direct taxation system in the country, can push the country’s growth by one and one-and-a-half per cent.
Reaching out to main opposition party which is opposing the bill that is pending in Rajya Sabha, Jaitley said, “I would urge the current leadership of Congress party also to look at the history and legacy they want to leave behind.
Support these measures so that we are able to grow faster. We have more money to get rid of poverty much faster.” He noted that GST was first brought by the previous Congress-led government and was “unquestionably” the “collective wisdom of everybody… But today they oppose.”
At the same time, he praised Trinamool Congress leader and West Bengal Chief Minister Mamata Banerjee and JD(U) leader and Bihar Chief Minister Nitish Kumar for openly supporting GST.
The Finance Minister hoped that the growth in the current year would be 7-7.5% and the fiscal deficit would be restricted to 3.9% of the GDP with quality “much superior” than previous government.
The fiscal deficit target will be met without any cut in expenditure, he said, adding whatever amount has been promised to various schemes as also to the states will be given.
There will not be any difference between budget estimate and revised estimate, Jaitley said.
“With moderately good GDP numbers, fiscal deficit under control, we intend to achieve current account deficit (CAD) of 1.2% of the GDP (in the current fiscal),” he said.
He underlined the need for faster growth of the country to insulate itself from the global economic crisis which is recurring frequently.
“The world has become integrated…Crisis, volatility and turmoil has become a new global norm…we have to strengthen our economy so that we become resilient to a large extent from these turmoil,” he said.
Talking about various challenges, Jaitley said Indian exports have suffered because of global slowdown and reduced puchasing power of importing nations.
The second challenge, he said is with regard to deficient monsoon which has been below normal for the last two consecutive years.
“I hope the Rain God will be as kind to this government next year as it has been to the previous government,” he said as he noted that Monsoon has never failed for three consecutive years earlier.
The other challenge concerns the slower private sector investment in the country, the Finance Minister said, adding when private sector investment slows down, the onus of promoting investment falls on the government.
“When there is a challenging situation private investment slows down,” he said.
He said the country can take some satisfaction from the fact that it is one of the fastest growing major economy of the world but the challenge is to make India grow much faster.
There could be some shortfall as far as direct tax collections are concerned, Jaitley said, adding, indirect taxes mobilisation have gone up.
Responding to questions raised by Trinamool member Saugata Roy over FDI, the Finance Minister said investment is required for economic growth and there is a need to create to conducive atmosphere for investment.
“If dollars stop coming to India then rupee-dollar parity will also be disturbed,” he said, while noting that FDI has increased by 40% compared to last year.
Jaitley said the low crude prices are being utilised for creation of public utility like highways and rural roads.
“The situation created by low oil prices has helped us in being able to utilise funds for larger public utility. Part of it is passed on to people, part to oil companies, which have suffered losses,” he said.
Besides, a part of the saving is being utilised for construction of highways and rural roads, he added.
Observing that public sector banks are facing a very challenging situation with regard to bad loans, the Finance Minister said the government is trying to address the problems of the sectors like highway, steel and power which are mainly responsible for rising NPAs.
“Banks are facing a challenging situation. I have no hesitation in taking the House into confidence. Some people feel best appointments were not made either as executives or at the Board level,” he said.
“A large number of loans were given indiscriminately. NPAs at around 6 per cent, Stressed assets at around 6 per cent and actual figure could be slightly more,” he said.
“Banks need to be corrected and needs to be recapitalised,” he said, adding, the government will provide more funds to public sector banks in the third supplementary demand for grants.
As regards stress in the steel sector, the Finance Minister said it was because of external factors.
China was dumping steel at lower price than the domestic steel production cost leading to stress in the sector, he said, adding this problem exists from last government.
“No action was taken…we imposed safeguard duty. We addressing the problem,” he said.
Talking about FDI, the Finance Minister said the states have been competing with each other in attracting funds from abroad with Chief Ministers travelling to various countries.
He used this to attack those who have been criticising Prime Minister Narendra Modi for travelling abroad.
“Why do you grudge when PM goes abroad. I feel proud when PM attracts such big crowds abroad. I don’t grudge when the Chief Ministers go around the world,” Jaitley said.
He said Kerala was reluctant earlier in opening up for FDI but now it has opened port for it.
While talking about the competition among states, he noted that three tribal-populated states — Odisha, Jharkhand and Chhatisgarh — were recently ranked among the five top states in terms of ease of doing business.
When some member pointed out that it was because of presence of mines in these states, Jaitley agreed and went on to target the previous UPA government, saying that unlike the past when mines were given “mindlessly to people”, they are being used properly now.
He also highlighted that Bihar recently got FDI worth Rs 40,000 crore with the investors being global giants GE and Alstom. “We are happy that in a state like Bihar investments are coming,” he added.
He also talked about implementation of the 14th Finance Commission under which states are being given 42% of the revenue share compared to 32% earlier and said, accordingly the states will get additional Rs 1.59 lakh crore, up from 6.80 lakh crore last fiscal.
With regard to social sector spending, Jaitley said there will be no cut on expenditure on MNREGA.