Zee Media Bureau/Reema Sharma
New Delhi: Exuding confidence over the prospects of further growth of India's economy, Finance Minister Arun Jaitley on Saturday said that the mood of the country changed when the election results were announced.
"When the new government had taken over, I had outlined the priorities of the government. Containing inflation was an important priority, restarting the growth cycle, rebuilding the investment cycle and keeping the fiscal deficit at acceptable level was one of the principle objective that we had taken at that stage," he said.
Jaitley reiterated, "It is in the backdrop of these challenges that in little less than 3 months that we took over, I must consider that the election itself was a mood changer. The election result itself resulted in some important development. After 30 years you had a single party majority in Parliament and therefore decision making became easier."
Talking about the situation of economy, Jaitley said that the country was facing a significant challenge in which decision making had considerably slowed down and the mood was significantly low.
He said that the new government was clear about the direction in which it wanted to go. "We wanted to expand economic activity, open up in several significant sectors, expedite decision making while maintaining the social sector expenditure in most areas," he said
Appreciating the PM and the PMO for its support, Jaitley said that there were no internal issues in the government as the country had seen in the past.
Talking about the issues of taxation, he said that there was a significant grievance that investors had with regard to certain taxation issues. He said, "We created a mechanism for resolution for tax disputes. The scope for discretion in transfer pricing was narrowed down. There have been several cases where we have opened out defence and railways were the most significant ones."
"Raising of FDI limit in defence has been accompanied by a series of important steps that we took. We have de-licensed 53 percent of the defence manufacturing items," he said.
Expressing optimism on the insurance amendment bill , the finance minister said that it will be passed in the next session of Parliament.
He said that the government has opened many sectors to manufacture in India. The long term impact of all these decisions will gradually be seen in all areas including SME sector, real estate sector etc.
"The internal body of investors are looking at us with great curiosity and I am sure we will see the impact of this," Jaitley said.
He said that there is by and large moderation of inflation, most sectors are indicating a positive curve and this is in the place of relatively challenging monsoon this time. The manufacturing curve has turned around, services are looking up. Jaitley said that in the first quarter of this year a 5.7 percent growth rate is encouraging. He added that, in the long term, the impact in the coming quarters will be much larger.
"We have an ambitions disinvestment plan which will roll out in the coming days. I have already indicated that the selection committee will soon start working on the insurance bill. A significant amount of investment is waiting to come in that sector," he said.
Jaitley added that the government will have to discuss with the expenditure management committee, and that they may submit some early recommendations on subsidy rationalisation. The finance minister has already flagged the issue during the budget discussion of Parliament.
Jaitley said that he is already in talks with the finance minister and chief ministers of some states with regards to the issue of goods and services tax (GST). He said that an early development of the constitutional frame work is on top of the government agenda.
"As we started working in the administration of the new land acquisition law, the states and the centre have realised the challenges that have arisen. I am going to discuss this with the all political parties and the rural development minister as to whether more flexibility will be available, specifically keeping in mind slight expansion in exemption," he said.
Jaitley lastly complimented the banks and financial institutions for their continuous effort in making the Pradhan Mantri Jan Dhan Yojna a great success. He said that the initial desire under the scheme to get enrolled was so high that despite festivals in many parts of the country, the enrolment still continues.
