Zee Media Bureau
New Delhi: Retrospective tax has only brought bad name to India, instead of garnering more taxes, Finance Minister Arun Jaitley said in Lok Sabha Wednesday.
Jaitley was replying to a debate in the Lok Sabha on Supplementary Demands for Grants for an additional expenditure of over Rs 12,500 crore.
However, the actual cash outgo would be Rs 500 crore. It was later passed by the House.
Referring to the Select Committee report on further opening of insurance sector, Jaitley said, "Large investments are waiting to come in. We have to open the doors."
The committee has suggested a composite foreign investment cap of 49 percent in the insurance sector, as against 26 percent FDI cap currently.
On the growth prospects, Jaitley said there are challenges but hoped that it would be within the projected range of 5.4-5.9 percent in 2014-15 and cross 6 percent in the next financial year.
Underlining that growth would depend on the states, he talked about cooperative federalism and announced release of Rs 11,000 crore to states in the current fiscal as part payment towards CST compensation to facilitate roll-out of the Goods and Services Tax (GST).
Jaitley has also called a meeting of all state finance ministers tomorrow to iron out contentious issues as he looks to introduce a constitutional amendment bill in the current session of Parliament.
"I have tomorrow called all the finance ministers of the state and GST is an issue on which broadly most parties have agreed. Let me put the statement: a major impediment in the implementation of the GST has been the trust deficit between the states and the Centre," he said.
Advocating more autonomy for the states, the finance minister said: "...Allow states to rule...Because they have as much mandate to rule their states as much as we have to rule Delhi. We will maintain the spirit of cooperative federalism."
He added: "Even the Congress Chief Ministers (during the meet) that I heard, subject of their speech was decentralisation, cooperative federalism. One size does not fit all. Let the states decide and give more power to states."
He further said, "But because probably you (Congress) told them that it is our baby, the first sentence used to be, Planning Commission did a very good job. It should not be replaced. The rest of speech of even regional parties was broadly the same."
Jaitley said: "Do you only pay lip sympathy to cooperative federalism that you have a central government structure by an executive order or you have structure where centre, states and experts decide to minimise the number of central schemes."
The government concluded the consultations for deciding on the structure of the new body with Chief Ministers on Sunday. It is expected that the new body will be in place by the January 26.
With agency inputs
