‘Every Budget Decision in the Cause of Reform’
Jaitley defends 10% surcharge on higher income, says state needs resources
New Delhi: Finance minister Arun Jaitley on Friday defended his decision to impose a 10% surcharge on income above .₹ 50 lakh and said that in a tax non-compliant society, the state needs resources that have to come from the affluent. In a post-budget interaction with industry chambers, he noted the need for the industry to step up on various issues including bad loans.
Laying the onus on the industry to support and facilitate the government’s drive against the shadow economy and programmes such as Make in India, Jaitley said every decision the government has taken has been in the direction of reforming and improving upon the present systems.
“Whether it was to target subsidies to the more deserving, end discretions, ease the process of doing business, rationalise taxes or cleaning up the system,” he said.
On the issue of Goods and Services Tax (GST) the finance minister said that he hopes to get Central GST (CGST) and Integrated GST (IGST) draft legislations approved at the next GST Council meeting on February 18 and bring them in the second half of ongoing Budget Session.
“Hopefully, my target currently is to finalise those drafts and take them in the second part of the budget session in Parliament,” he said.
The finance minister noted that a realistic fiscal deficit target of 3.25% of GDP has been fixed for 2017-18 and 3% for the next year that could be achieved on account of higher tax revenues and disinvestment proceeds.
“This year our collections are higher than what we had anticipated and hopefully we will maintain that course even next year,” said Jaitley adding that the government intends to list more PSUs to make them competitive and transparent.
When asked if the government is looking to set up a bad bank, as also suggested in the Economic Survey, Jaitley said, “It (bad bank) is also a possible solution. We will take it on board for discussion.”
The finance minister, however, said that the government does not want to get into a situation where eventually it will all converge to a government issue and then the whole thing will have to be supported only out of the budget.
Confederation of Indian Industry (CII) Naushad Forbes said that weakening of the savings rate is a cause for concern and asked for boosting financial savings of households by encouraging investments in equity markets and bonds.
FIGHT AGAINST BLACK MONEY
Post demonetisation, government agencies have conducted over 1,100 searches and issued 5,100 notices to verify suspicious high-value cash deposits. Valuables worth over .₹ 610 crore of which Rs 513 crore in cash were seized.
“The undisclosed income detected in these ongoing investigations till January 10, 2017, was more than .₹ 5,400 crore,” Finance Minister Arun Jaitley said in the Lok Sabha.