Finance Minister Arun Jaitley on Monday sought support of the Congress for passage of the Goods and Services Tax (GST) and Bankruptcy Bills but also hit out at party vice-president Rahul Gandhi for his “fair and lovely” jibe at the Government, saying it reflects a “racist mindset”.
Replying to a debate in the lok Sabha on the General Budget 2016-17, he also rejected demands for rollback of
1 per cent excise duty on jewellery saying it was in preparation for unveiling of the GST. The House later passed the Appropriation Bill, completing the first phase of the budgetary exercise for 2016-17.
Asserting that India can grow faster in the “absence of obstructionism,” Jaitley also responded to an attack on the Government over major loan defaulter Vijay Mallya’s escape from the country, saying there was a “question” as to whether the “legal system” had acted as a “hurdle” in loan recovery and enabled the “escape” of the debt-ridden businessman.
Talking about black money, Jaitley referred to the “fair and lovely” comment made by Rahul Gandhi while speaking in the House last week. Without naming the Congress vice-president, the Finance Minister said, “I have no problem with this phrase, but this phrase is politically incorrect. It shows a racist mindset that what is not fair is not lovely.” He went on to add, “World over, people frown on the use of such a phrase. In any case, I will pass it off as ignorance.”
Rahul had used the phrase while alleging that the Government had brought the black money disclosure scheme in the Budget to enable conversion of black money into white.
Under attack for not passing on benefits of fall in crude prices to consumers, Jaitley said the savings were being used for developing infrastructure to push growth and create jobs, besides enabling oil marketing companies to meet their losses.
When Congress leader Mallikarjun Kharge said only 50 per cent of gains from low crude oil prices have been passed on to consumers, Jaitley said, “The benefit of reduction in crude oil has been divided into three portions. One goes to public sector oil marketing companies. These oil companies make future purchases of crude oil and they had incurred losses.”
He said at one time, these oil companies were sitting on `30,000 crore losses and that couldn’t have been met by increasing Income-Tax or any other tax. “So, naturally oil companies, which decide the price in the market, would wipe off their losses first, he said.
Noting that the global environment was a challenging one, Jaitley said the country needs to rise above party lines to maintain the distinction of being the fastest-growing large economy.
“We compare ourselves with global standards, we are doing good. But if we compare ourselves with our own standards, we can do better in a more helpful global environment and domestically in absence of an obstructive environment,” he said.
Seeking support of the Congress he said, “The country needs a Bankruptcy law. Hope the joint committee will soon give its report so that it gives the right of transfer to the management. So that the incompetent can exit, jobs are saved and more competent can take on the businesses”.
On the black money disclosure scheme, Jaitley said it was unlike the earlier Voluntary Disclosure of Income Scheme (VDIS) or black bond scheme which favoured black money holders.
Under the proposed scheme a declarant will have to pay 30 per cent tax and 15 per cent surcharge and penalty, he said.
He referred to the VDIS of 1997 and said under it, no interest, no penalty was imposed and the declarants were permitted to value their assets at 1987 prices.
Similar concessions were available in the black bond scheme, he said.
Jaitley, in his 2016-17 Budget announced a disclosure scheme under which a four-month compliance window, ending September 30, will be provided to people to declare undisclosed domestic assets and income and come clean by paying 45 per cent tax and penalty.
“This is not an amnesty or VDIS. If you have any undeclared asset today, you have to declare it at today’s market value and pay 50 per cent over the tax. So it is not amnesty, VDIS or concession,” Jaitley said.
The United Front Government, during which P Chidambaram served as Finance Minister, had given an affidavit in the Supreme Court that it was the last amnesty scheme of the Government. The Government gave the affidavit thinking “after me the deluge”, Jaitley said, adding the Government changed but India had to live on. What was the need for any Government to bind any future GovernmentIJ”
The VDIS, which was described by many as unethical, immoral and improper was challenged in the SC. “The 1997 scheme was commented upon as being discriminatory upon an honest taxpayer because there was no penalty as it was valued at a 10-year-old value. As a result most declarants were either housewifes or minor children,” he said.