Jaitley cites past interim Budgets to defend tax incentives

Union Minister Arun Jaitley defended the detailed tax announcements made by Finance Minister Piyush Goyal on Friday, saying that there were precedents in the 2009 and 2014 interim budgets.

“Interim Budgets that are presented in the election year seek a Vote on Account for a limited period till the post-election government can decide the further direction of the economy. However, past precedents have conclusively shown that urgent steps are required in the larger interests of the economy and they can be taken,” Jaitley wrote in a blog on Facebook on Friday evening.

“We have the immediate precedents of the years 2009 and 2014, where significant taxation changes were brought about in the interim Budgets,” Jaitley added.

He reiterated that point later in the day during an interaction with reporters in the Finance Ministry. He was talking through video-conferencing from New York, where he is recovering from surgery.

“Will be back soon; I am much better now. Hopefully, will be back soon,” he said, when asked by reporters.

During the interaction, Jaitley said that the government had not broken any tradition by announcing tax rebates and other tax sops for the middle and salaried classes in the interim budget.

Jaitley gave the examples of the 2009-10 and 2014-15 interim Budgets, presented by Pranab Mukherjee and P Chidambaram.

Jaitley pointed out that while Mukherjee announced a stimulus package for the then-ailing economy in his reply to the 2009-10 interim Budget, Chidambaram announced indirect tax cuts to boost a number of sectors.

When said that Chidambaram presented indirect tax measures while Goyal has announced direct tax changes, Jaitley said that these are artificial distinctions.

“There are measures that you need to act on immediately, they cannot wait,” Jaitley said.

On the criticism regarding the nationwide income support scheme for farmers announced by Goyal, Jaitley said that farmers needed all the resources they could get.

“What we have done is focused on the sector that needs more help. In fact, those who are opposing us; their state governments should also add to our scheme and announce schemes of their own to top ours,” the minister added.

Jaitley was also asked if the budgeted projections for 2019-20 were rather optimistic, especially goods and service tax, in which the budget assumes an 18 per cent growth from the 2018-19 revised estimates.

“The average monthly tax collection in the current year is ~97,100 crore per month as compared to ~89,700 last year. In the third year, you will see more enforcement, you will see even more improvements and you will see more states moving towards the 14 per cent year-on-year GST growth mark,” he said.