More power for capital market regulator SEBI to check the rise of fraudulent deposit schemes through new legislation will not take very long if the BJP-led NDA coalition forms the next Central Government, said senior BJP leader and former Finance Minister Yashwant Sinha. In an interview with Business Line , Sinha also said that reforms, such as the Goods and Services Tax (GST), could become reality soon. Edited excerpts:

If the BJP-led National Democratic Alliance forms the Government, what would be its priority?

The immediate priority, in my view, would be to take steps to bring down food inflation. Second, would be to approve all pending projects which, in my estimate, amount to something like ₹15 lakh crore. To do this and to take other decisions, Ministers should be compelled to take full ownership of decisions so that bureaucrats don’t think that ministers use them as a shield. Then, work must start on the full Budget, which will have to be presented (in July). June, July, August and part of September, which are monsoon months, should be devoted to ensuring that work on various projects starts in full swing immediately after the rainy season. All these will need administrative arrangements.

Meetings with State Chief Ministers and Finance Ministers must be immediately held to work out a consensus on GST. Also, the Direct Taxes Code should be finalised and cleared by Parliament as quickly as possible.

How can inflation be controlled, by curbing demand or increasing supply?

There should be some fiscal measures, but largely the supply side should be strengthened. Why did I talk about food inflation, and not talk about other inflation? Because, I believe that it is possible to tackle food inflation in the short-term. And this will have a benign impact on other kinds of inflation. So, we can work out, again with State Governments, the measures that can be taken immediately to ensure that food prices come down.

How soon will GST be introduced?

I think infrastructure is very critical, as also assurance to States on compensation for their losses, if any, as in the case of Value Added Tax (VAT). But compensation should be for a (certain) period of time, not indefinitely.

The VAT experience will show that there was indeed very little or no loss. In fact, States benefited through higher tax receipts.

So my feeling is that the element of compensation will be small, if not non-existent. Two, in the Standing Committee on Finance, we tried to work out a consensus with States and some useful recommendations were made.

I feel one or two meetings with State Finance Ministers and, if necessary, with Chief Ministers should sort out the GST issue.

What about DTC, especially raising the personal income tax limit?

DTC should be a priority, as it has already been excessively delayed. The new Government will have to take a view on the recommendations of the Standing Committee. As far as the exemption limit of personal income tax is concerned, it is a political decision. We had recommended ₹3 lakh, but in our (BJP) manifesto, we have said ₹5 lakh.

What about empowering SEBI to check Ponzi schemes? It is said that the Standing Committee on Finance did not heed the Lok Sabha Speaker’s request for submitting its report on Securities Laws (Amendment) Bill.

I did not receive any request from the Speaker. The Finance Ministry had written to the Speaker to ask the committee to expedite the report, and the Speaker’s office merely forwarded the letter to us.

But there was no consensus in the committee, so we decided to postpone it. In fact, the draft report was ready.

I am quiet clear that we need to deal with both the regulatory issues – overlaps and gaps.

There was a strong view that the power of search and seizure to civilian authorities should be limited to a minimum. There were sharp differences (within the committee) on whether regulators such as SEBI should have the power of search and seizure. But it is possible to work out a consensus on this and the next Government will have to take a call. Ponzi schemes have to be tackled, there is absolutely no doubt about that.

What will be Aadhaar’s fate?

This (UPA) Government had all the time to take into account the unanimous recommendations of the Standing Committee on the UID Bill. They failed to do so, primarily because there were sharp differences within the Government.

There are some basic principles involved which the next Government will have to take a political decision on. One, should we issue any identification to all residents or should we restrict it to citizens.

Two, we already have a National Population Register (NPR) and a proposal of multi-purpose identity card for Indian citizens is included in it.

Now, a view is to be taken on whether it should be NPR or Aadhaar. It can’t be that half of the population is covered by Aadhaar and other half by NPR. My view is that we should proceed on the basis of the multi-purpose identity card under NPR.