Asserting that India was one of the major economies, which would do better with a little help from good monsoon, Union Finance Minister Arun Jaitley on Thursday said the Government’s efforts on black money have brought to the books undisclosed assets of Rs71,000 crore and ruled out withdrawal of excise duty on non-silver jewellery.
The Finance Minister warned of action against those passing off income from other sources as agricultural income but ruled out taxing farm earnings. He was responding in the House to demands from some lok Sabha members that agricultural income needs to be taxed.
Replying to a discussion on the Finance Bill 2016 in the lok Sabha, Jaitley hoped that good monsoon and revival of the rural sector would further help the economy. Jaitley’s reply in the House followed passing of the Finance Bill in the lower House. The Bill will now go to the Rajya Sabha.
The Finance Minister ruled out withdrawal of the 1 per cent excise duty on non-silver jewellery, a demand that was made by the Congress Party and ruling NDA constituent, the Shiv Sena.
“I have not been able to understand the politics of hatred for a ‘suit’ but love for gold,” the Minister said as he took on the Congress which was against imposing excise duty on gold and other precious jewellery.
In his hour-long speech, Jaitley said the Government will act tough against illegal offshore accounts. He said notices have been given to all in the Panama papers leak case.
The Minister described Non-Performing Assets (NPAs) of banks as “worrisome.”
He said the steel sector had contributed to the maximum NPAs as many companies closed down on account of cheap availability of steel from China. Anti-dumping duties imposed by the Government had led to the revival of the steel sector.
He said the Government will work to resolve the NPA problem of banks whose lending was essential for growth of the economy.
Responding to some MPs, particularly those from the BJD, demanding that agricultural income needs to be taxed, Jaitley said the Centre has not proposed to do it and also advised States against taking such a step.
“In any case, please remember, under the Constitution of India, the Centre has no power in the matter. It is a State subject,” he added. The Minister said there were some cases where people were passing off income from other sources as agricultural income, which, he said will be dealt under law as a case of tax evasion.
Jaitley said prosecution had been launched in the HSBC list where Rs6,500 crore of undisclosed assets had come to light, and the liechtenstein list. Also, Rs4,000-4,250 crore had been disclosed under the foreign black money law. He said through assessments another Rs71,000 crore of black money had been unearthed.
Jaitley criticised the 1997 Voluntary Disclosure of Income Scheme (VDIS) as the “most ill-advised.”
“They came out with the most ill-advised VDIS... It was an amnesty scheme. They said that if you are declaring gold and jewellery in 1997, that gold and jewellery would be valued at the rates prevalent in 1987 and that is why I called it ill-advised,” he explained.
Jaitley said the Budget for 2016-17 has provided for a scheme to deal with domestic black money where undeclared assets can be legalised by paying 30 per cent tax and an equivalent amount of penalty.
Meanwhile, protesting against the Centre’s commitment to the Polavaram multi-purpose irrigation project in Andhra Pradesh that is being opposed by Odisha, BJD members walked out of the lok Sabha.
BJD’s Bhartruhari Mahtab rose in protest and was heard saying that the matter was in the Supreme Court, an apparent reference to Odisha moving the court against the project. “We can look at Odisha’s grievances independently. I can’t go back on the Andhra Act,” Jaitley said.