Brushing aside criticism of not having done enough reforms in the Budget, Finance Minister Arun Jaitley has said this was the beginning of the journey and he did all he could do under the given circumstances.
“This is the beginning of our journey, not the end. Abhi hum jitna kar sakte the, humne utna kiya hai (Whatever I could do now, I have done). And all the decisions are not taken on day one,” Jaitley told the media.
Jaitley, who presented his maiden Budget on July 10, is being criticised, especially by rating agencies, for not repealing the retrospective tax amendment and not providing enough sops for the industry.
The Minister, however, has provided relief to the salary earners by sacrificing Rs 22,200 crore in direct taxes. Refuting the criticism, he said the government has taken important steps which are necessary but not taken in the past 10 years.
“Each one of those major issues, whether it is insurance or real estate, defence, retrospective tax, simplification of tax administration, transfer pricing (were important). So in 45 days, we have tried to address each one of them and then we have given impetus to the manufacturing sector.
“These are important decisions. Our government is very clear in some sector you got to give more relief. Aam aadmi par aap kitna bojh denge? (How much can we burden the common man?). So, that is why we tried to rationalise individual taxation. We have also removed inverted duty structures,” Jaitley said.
The Budget has proposed increasing the income tax exemption limit to Rs 2.50 lakh from Rs 2 lakh and raised the ceiling on investment in saving instruments to Rs 1.5 lakh from Rs 1 lakh per annum.
On criticism of Budget not having a detailed roadmap for fiscal consolidation, Jaitley said: “I have not spelt it out in details because I have provided for Expenditure Management Commission and if anybody feels that in 45 days you can come out with the scheme of rationalisation of subsidies to which people in the last 66 years have not found an answer, we must rate the agencies then.”
He said that there are two ways of reducing fiscal deficit — either you spend less or you earn more. “The ideal situation is that you should earn more because if you spend less then you are contracting expenditure and you may end up contracting some parts of the economy… I have looked at unresolved issues that they (UPA government) left behind or the problems they have left behind,” he said, adding in the period of 45 days he has tried to address most of these problems.
The Budget proposed restricting fiscal deficit this year to 4.1 per cent of GDP and bring it down to 3 per cent by 2016-17. This is in line with the road map laid out by the UPA government.