Policy

Will cut taxes further if voted back to power: Jaitley

Our Bureau New Delhi | Updated on April 04, 2019

Finance Minister Arun Jaitley   -  THE HINDU

GST on cement will be reduced in the next rate revision, says FM

Finance Minister Arun Jaitley on Thursday made it clear that if the Modi Government is voted back to power, it will continue to lower the tax rates. He also indicated that GST on cement will be reduced in the very next round of rate revision.

“I’m quite clear in my mind that on two issues: at least we had a lot of good fiscal prudence and we brought the rates down. If we are in power we will continue the same glide path,” Jaitley told industry captains while addressing the CII Annual Session here.

The Narendra Modi-led government has maintained that it did not increase tax rates even once during its tenure. Also, it claims that fiscal deficit, despite a small increase, is still manageable.

The Finance Minister said barring one, all other inputs in the real estate sector now have GST at 12 or 18 per cent, while under-construction flats under affordable and other categories have GST at 1 and 5 per cent respectively. He said the only item left, that is cement, will soon have lower GST rate.

“In the last 20-odd months of the GST, except for cement, that is because of affordability….it is only a matter of time that the last one also comes down,” he said.

Jaitley did not appear perturbed by the lower growth projection by the Reserve Bank of India and the Asian Development Bank. The RBI, on Thursday, lowered growth projection to 7.2 per cent, from 7.4 per cent, for 2019-20. Similarly, on Wednesday, the Asian Development Bank sliced growth projection by 40 basis points to 7.2 per cent. However, Jaitley maintained that there is stability.

“We have come to 7-7.5 per cent (growth rate) range despite the fact that there is no global boom or support of any kind, and we have stabilised at that, you need to graduate further,” he said.

Considering the election season, the Minister also used the opportunity to answer political queries. When industry wanted to know what steps would be taken to boost manufacturing if the government is voted back to power, he said, “Wait for a couple of days, when our manifesto comes out, you may find some of the views expressed in that.”

Criticising the Congress over alleged remarks about funding of NYAY (Minimum Income Scheme) through ‘Chor businessman’ he said with this mindset, India can’t work.

“Our growth model is that we have to have reforms that are market based, we have to allow the economy to grow further, expand economy and use the enrichment for poverty alleviation for providing rural infrastructure and support to poor and vulnerable. It's only an economy which can afford this is able to provide relief to poor,” he said.

Highlighting the importance of the middle class in the electoral politics, he said the socio-economic character of India's population is significantly changing and issues that used to be discussed 30-40 years ago are not going to be relevant for too long. “My own assessment is not in this election, but by the next general election in 2024, India's middle class and neo-middle class will be the largest vote component. And therefore, the quality of public discourse in policies will have to be completely different,” he said adding that governments, politicians, ministers, leaders and manifestos will be tasted and judged by much harsher standards.

Published on April 04, 2019

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