New Delhi: Rejecting the charge that the government was pro-rich, finance minister Arun Jaitley took the battle to the Congress’ door on Tuesday, saying he borrowed the idea of reducing corporate tax from predecessor P. Chidambaram, and asked the Opposition not to obstruct the country from achieving eight per cent GDP next year, overtaking China.
Replying to the Lok Sabha debate on the Appropriation Bill, the minister justified the government’s bid to open more sectors to foreign investment, saying more funds were required to create jobs, develop infrastructure and undertake social welfare programmes.
“This is a historic opportunity where India has a real chance of growing. The world also sees India as a bright spot. We must use this opportunity... Let politics of obstructionism not go to the next stage,” Mr Jaitley said.
The finance minister said the global economic situation suited India as Brazil faced challenges, Europe has slowed down and China’s seven per cent was the new normal.
“It is important to understand for those political parties which have adopted obstructionism as their strategy... You prevent economic decision-making, investment, revenue, jobs and infrastructure. You want to perpetuate India as a poor country,” he said.
On reduction of corporate tax from 30 per cent to 25 per cent, the finance minister said he had borrowed the idea from the Direct Taxes Code prepared by Chidambaram.
Mr Jaitley said the reduction in tax slab was necessary to create a competitive climate as investors are encouraged to invest in the country. “The effective tax rate is 23 per cent globally, 21.9 per cent in Asean nations and 19.66 per cent in Europe. Who will invest in India if the tax is 30 per cent?” he asked.
In a veiled message to the RBI, Mr Jaitley also made a case for reduction in interest rates, warning that growth will otherwise suffer.
