Arun Jait­ley

Min­is­ter of Fi­nance, Cor­po­rate Af­fairs & De­fence


Q. On growth and key achieve­ments

A. In In­dia, we had a leaky legacy prob­lem. Dur­ing the boom pe­riod, the banks lent in­dis­crim­i­nately and now they don’t have money left to sup­port growth be­cause of the NPAs. I think judged in this back­ground there are 4-5 im­por­tant things that the gov­ern­ment has done. The pace of struc­tural re­forms has been the fastest ever in re­cent his­tory. The present gov­ern­ment has shown that there is no fin­ish line. There were those who pre­dicted that with de­mon­eti­sa­tion growth will fall over 2 per cent, but noth­ing of that sort hap­pened. So ev­ery cri­tique has been proved wrong. We have re­stored the place for hon­esty and in­tegrity in In­dia. The mid­dle­men are on the run. The gov­ern­ment has elim­i­nated dis­cre­tion, things move on their own. Delhi is not in 2017 what it used to be pre-2014. Rev­enue col­lec­tions have had a big jump de­spite a global slow­down, rev­enues have grown 17-18 per cent a year for the past two years. This gives us flex­i­bil­ity on spend­ing. In­fra­struc­ture re­vival is tak­ing place, roads and high­ways are grow­ing; air­ports are an even big­ger suc­cess story. Port ac­tiv­ity has moved on, on power we are sur­plus, so much so now the prob­lem is how to man­age the sur­plus when the de­mand is less.

On giv­ing RBI the man­date to tackle NPAs

In the last few years, not a sin­gle ma­jor ac­count has been sorted. The prob­lem is not wide­spread—it re­lates to 40-50 ac­counts and there­fore you have all the RBI cir­cu­lars in place, you have the Joint Lenders Fo­rum mech­a­nism in place. All th­ese will jointly lead to some res­o­lu­tions. And why RBI? I think North Block in­ter­ven­tion in the bank­ing sec­tor has brought a bad name, even though done in­for­mally in the past. We must main­tain arm’s length.

On fledg­ling pri­vate in­vest­ment

Pri­vate in­vest­ment is di­rectly linked to the bank­ing is­sue. They ex­panded in­dis­crim­i­nately dur­ing the boom pe­riod, cre­at­ing a sit­u­a­tion where they can’t re­pay the banks. So the banks now don’t have money to sup­port pri­vate in­vest­ment. NPAs go to the root of the is­sue.

On De­mon­eti­sa­tion

I see three very pos­i­tive out­comes. One, a mes­sage has sunk in that it is no longer safe to deal in cash, whether it is prop­erty or any­thing else. There is a greater move­ment to­wards digi­ti­sa­tion and our tax col­lec­tions, par­tic­u­larly at the level of in­come tax, have gone up. You have al­most a 30 per cent in­crease in the num­ber of as­sessees in the per­sonal in­come tax cat­e­gory and this doesn’t take into ac­count the evaders. Some 1.8 mil­lion peo­ple still face a no­tice.

On fi­nance bill amend­ments giv­ing un­prece­dented pow­ers to the tax de­part­ment

This was just fake pro­pa­ganda from the start. Tax eva­sion was sought to be de­fended as a rights is­sue—this was the tenor of the sec­tion 132 (a) de­bate! Since the IT Act in 1961, when­ever the tax de­part­ment re­ceives in­for­ma­tion of eva­sion, it records rea­sons— name of the source, in­for­ma­tion given and the rev­enue in­tel­li­gence as to why this per­son has to be raided. But this sat­is­fac­tion note is never given to the as­sessee. A court ob­ser­va­tion made this po­si­tion am­bigu­ous—that you may have to give it. Hence the clar­i­fi­ca­tion is that this in­for­ma­tion may be shown to the court—if the court asks for it. But it can’t be given to the as­sessee. This is the im­pact. It is an anti-eva­sion step. Where in the world are in­for­mant de­tails, in­tel­li­gence on tax vi­o­la­tors given? This is like giv­ing an IB re­port to a ter­ror­ist.

“For this gov­ern­ment, there is no fin­ish line”

Ar­guably In­dia’s most pow­er­ful min­is­ter, ARUN JAIT­LEY speaks to Se­nior Editor Sh­weta Punj on the ‘suc­cess’ of de­mon­eti­sa­tion and the brand new New Delhi com­ing up un­der the Modi gov­ern­ment


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