Finance Minister Arun Jaitley said the economy would need much more time to shrug off the effects of past missteps but indicated that the NDA Government was ready to take hard decisions to bring back growth.

“Merely undoing wrongs of the past will not cure all our problems…the pit was reasonably deep, therefore, rectifying it will require a lot of time,” Jaitley said at the India Economic Summit organised by the Geneva-based World Economic Forum and the Confederation of Indian Industry (CII).

He said the Centre was committed to more reforms, such as labour, land acquisition, privatisation of loss-making public enterprises, and rationalisation of subsidies.

The Finance Minister said reforms are not about one big idea. “Some people expect that second-generation reforms in India really need one or two Big Bang ideas…. Reforms are not about one sensational idea. You can damage the economy by one bad idea. Retrospective taxation was one such bad idea which damaged the economy.”

Retrospective taxation, which was carried out by the previous Congress-led UPA Government, had evoked strong criticism from investors, notably Britain-based global telecom major Vodafone, which is facing a tax liability of about ₹20,000 crore.

Disinvestment The Finance Minister said the Government is following an approach of divestment rather than outright privatisation. But added that he was open to loss-making public sector units being sold off. Currently, the Government supports loss-making public sector undertakings (PSUs) to pay wages and statutory dues, but Jaitley made it clear that taxpayers cannot support this for long.

The Government has initiated a move to close down six chronic loss-making PSUs — HMT Watches, HMT Bearings, HMT Chinar Watch, Hindustan Photo Films, Hindustan Cables and Tungabhadra Steel. On wider access to foreign investors, the Government would follow a sectoral approach, he said. The Government recently raised the foreign investment limit in the Defence sector to 49 per cent, while the Insurance Bill is awaiting passage in Parliament. Railways and real estate are the two other sectors where foreign investment has been made easier.

Corruption, crony capitalism Elaborating on steps to deal with corruption and crony capitalism, the Finance Minister said those who administer the country will have to change their mindset. “We are attempting (to change the mindset)”, he said.

Admitting that there were challenges ahead, he said: “There are bound to be some hurdles, one need not get unnecessarily upset about them. There is a lot within the present political framework and the Government’s framework that can be done...but one thing that should be clearly borne in mind is that no step that sends contrary signals should be taken.”

Jaitley said the new Government had come out with an ordinance on coal with a view to ending discretion and introduce fairness in allocation of blocks. “The actual users (of coal) get it by a process of e-auction and thereafter, if the Government desires, it will open it up for commercial mining. I can tell you with regard to other minerals that we are about to undertake similar reforms.”

Trade facilitation On India’s position on trade facilitation at the WTO, Jaitley said there was no ideological opposition on the issue. Even without a commitment, India would unilaterally support moves to facilitate trade. However, a solution is required to the dispute regarding holding of food stocks by India.

The Finance Minister said he would focus on easing procedural complications to tackle the bottlenecks created by the Land Acquisition Bill introduced by the previous Government.

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