BackTax revenue growth good, divestment programme on track: Arun Jaitley
Jaitley hints at complete privatization of some loss making PSUs, terms political opposition to the ordinance route as obstructionism
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Davos: The government will go ahead with its disinvestment programme and “a lot of activity" is expected on that front, finance minister Arun Jaitley said on Friday, while hinting at complete privatization of some loss-making public sector units (PSUs) at a later stage. He also said that the government’s tax revenue collections have been good, although refunds for past periods are making an impact.
On whether the government would look at privatization as well, Jaitley said it can be done in case of companies that are not doing well as the government cannot keep funding losses of a company with the taxpayers’ money.
“As far as divestment is concerned, we are committed to our divestment programme and a lot of activity is expected," Jaitley said here on the sidelines of the World Economic Forum (WEF) summit.
“I wont talk about the companies, as media speculations is hurting the programme and it also leads to market speculations," Jaitley said. “Therefore, as far as individual companies are concerned, I am absolutely in no position to share anything with the media. But we are fairly committed to the divestment programme and we will go ahead with it in the current fiscal as also in the next fiscal."
On the issue of privatization, the finance minister said, “Those would be the companies that are not doing well...the government can not keep taxing people in order to fund losses year after year."
Jaitley said no names have been worked out yet.
On the issue of tax collection, Jaitley said, “I won’t say we have poor tax collections. If you look at income-tax or direct tax growth, that has been significant even though we are not passing through a fast-growth economic phase. Despite a growth rate of 5.5%, the direct taxes have substantially increased. It is the refunds that have created a problem for us as I also have to pay for the past liabilities."
Ahead of US President Barack Obama’s India visit, Jaitley said the two countries should be able to reach consensus on areas that are of top priority for cooperation between them.
“India and US have a matured relationship. There is a large number of areas where we agree with each other. There are also some areas where we may not come to a particular common view point but that is the maturity of our relationship that it will still survive despite those differences. My view is that in areas that are on top priority for cooperation, we should be able to reach a conclusion," he added.
When asked if these areas would include climate change and nuclear issues, Jaitley said, “We have different approaches to climate change and, therefore, to have a common stand, it is for those involved in the negotiations to comment."
Replying to a question on whether global investors present at Davos were expecting a “big bang" budget from him next month, Jaitley said the sum total of the reform measures and other policy initiatives already taken would be much more than “the big bang". “If you take the sum total of all the steps we have already taken, it will be much more than the big bang. Even big bang looks small in comparison," the finance minister said.
When asked whether he was tempering down the expectations, the minister said, “I am not tempering down the expectations. Opening up sacrosanct sectors like railways, defence, is that not big bang? Goods and Services Tax (GST), which everyone thought will never see the light of the day, is that not big bang? In the mining sector, in allocation of natural resources, what we have done, is it not big bang? After all these are the steps that we take in management of the economy of the country. These are steps which our predecessors had failed to take. The budget will be a very important occasion for this government, but then the next 364 days are equally important."
On the road ahead of raising tax revenues from oil when prices were falling, Jaitley said, “I can’t say what will happen in future, but then there is of course a lot of benefit that we have passed on to the people.
Terming political opposition to the ordinance route for reforms as “obstructionism", Jaitley said foreign investors have no problems with these decisions and they were rather happy that the government has brought in legislation.
“Actions taken under the ordinance are deemed to be valid and at the end of the day, everyone knows that both in the lower House and also in the joint House we have the numbers and, therefore, the obstructionists can only delay. The obstructionists cannot derail it," Jaitley said.
The minister said that the investors across sectors are very enthused about India and were waiting to come in.
To a question on by when he expects investments to pick up, Jaitley said, “We are quite close to that point because there are a large number of investors who are waiting to come in and they only want to be doubly sure about the credibility of the decision making process and the stability of the policies." “Banks, insurance companies, manufacturing companies and technology companies all are looking at India. Of course some of them do have issues, but uniformly all of them are enthusiastic about the changes that are taking place in India. The government has made its intention very clear about the roadmap that it wishes to pursue. Some have individual issues and I think meeting them here adds to the comfort of investing in India," he added.
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