Jaitley wants RBI to cut interest rates
Govt has taken measures to ensure tax disputes don’t take place: Jaitley
Finance minister Arun Jaitley on Saturday clearly indicated that his ministry wants the RBI to cut interest rates to give a helping hand to the economy, which is showing signs of revival.
Mr Jaitley expressed confidence that the insurance bill will be passed in the next session of Parliament as he sees a “positive attitude in some of the principal Opposition parties” and there will be no need to call a joint sitting of Parliament. He also admitted that the coal judgment could have an adverse impact on the economy but hoped that the Supreme Court would not allow uncertainty to linger for long.
Presenting a report card on the first 100 days of the Modi government, Mr Jaitley said the economy is turning around, investor confidence is improving, most sectors are indicating positive news, the manufacturing curve has turned and inflation is moderating.
Asked when he saw the RBI cutting interest rates, now that inflation is moderating, Mr Jaitley said: “Left to myself, I hope very soon. I am sure that those who decide also heard your question.”
The finance minister said that when three months ago, the BJP- led NDA government came into power at the Centre, the country was going through economically- challenging times. “The country was facing significant challenges, decision- making had considerably slowed, there was loss of investor confidence, and the mood was significantly low,” Mr Jaitley said. He claimed that even the “election result itself was a mood changer” as with a majority government, taking economic
decisions was easier. “We wanted to expand economic activity, hasten decision- making, ease doing business, open up in significant sectors while maintaining social sector expenditure in most areas,” the finance minister said. He said that there were no internal issues in this government as was seen in the past and the finance ministry enjoyed the Prime Minister’s support on all decisions.
He said that the government has taken several measures to ensure that tax disputes don’t take place and has increased FDI in defence and railways and eased foreign investment norms in the real estate sector.
Mr Jaitley said that most of the government deci- sions were relating to infrastructure, increasing manufacturing, giving fillip to the SME sector and the real estate sector. “I think the long- term impact of all these decisions would gradually be felt. If you look at the impact today in terms of investment mood, there is a sea change,” Mr Jaitley said.
He said that the government has set an ambitious disinvestment plan and a select committee will soon start its work on the insurance bill where huge foreign investment in waiting to come into the country.
The finance minister said that he will be meeting the members of the expenditure commission to ask them to submit some early recommenda- tion on subsidy rationalisation. Mr Jaitley said he was “more confident” now of achieving the fiscal deficit target of 4.1 per cent of GDP due to the jump in GDP growth.
On the coal verdict impacting the economy, Mr Jaitley said: “Obviously, if the resource can’t be utilised, its adverse impact is inevitable and therefore we only hope that this uncertainty doesn’t continue for a long time.” He said that the impact will also depend upon what shape the litigation in the Supreme Court takes further. “We cannot allow the fate of the coal blocks to hang in mid- air. They need to be utilised for the purpose for which coal is utilised and therefore whether the existing allo- tees are to use it or it is to be put to a fresh allotment process, I do hope that this decision does not linger on... the fate of these is decided expeditiously,” said Mr Jaitley.
On the insurance bill, the finance minister said that he does not think that things will reach a point where there will be a need to call a joint sitting of Parliament.
“I am reasonably confident because any political parties which had mooted the idea of this bill in the past cannot have any serious reservation against it ( sic). I do see a positive attitude in some of the principal Opposition parties,” he said.
Mr Jaitley dismissed any perception that power is centralised with Prime Minister Narendra Modi, saying ministers enjoy a large extent of decentralisation with accountability. “See this whole debate is not about over centralisation. For instance, I look after different departments in the government and the extent of decentralisation that we enjoy is very large,” said Mr Jaitley.
He said that there was accountability for the ministers. “But certainly, if you have a very active Prime Minister, along with this decentralised authority which has been given to us, there will be an element of accountability,” Mr Jaitley said.