Finance minister Arun Jaitley (right) at the Chartered Accountants’ Day function in New Delhi on Tuesday. (PTI)
New Delhi, July 1: Finance minister Arun Jaitley today indicated that fiscal prudence and reforms would be the twin watchwords in his upcoming budget.
“What India needs is a certain amount of fiscal discipline. There is hope that bold decisions will be taken now,” Jaitley said at a function organised by the Institute of Chartered Accountants. “At times, tough and not-so-popular decisions (have to be made and) you should realise that there is a case where the country’s economy has to be put back on the rails.”
Jaitley and his team of officials today attended the traditional Halwa cooking ceremony at the North Block’s underground chambers. The Halwa ceremony sets in motion the process of printing of the budget papers and also marks the period when officials involved in budget-making are “locked in” their offices to maintain the secrecy of the documents.
Jaitley said there was renewed interest in India among global investors, which the country should take advantage of by coming up with reforms and a stable tax agenda.
“An interest has suddenly emerged on India, which has been falling off the global agenda. It is for us to respond to this opportunity,” he said.
India is expected to announce a date for tax reforms such as the goods and services tax and the direct tax code. The government is also expected to ease foreign direct investment rules and introduce steps to cut red tape and open up the country’s mining sector.
“I am willing to look at legislations because a new government has the liberty to write afresh,” he said. The minister, however, warned that populism “will be a one-way pat in the back by an ill-informed opinion. We will walk into peril, a trap difficult to get out of.”
Officials believe the civil war in Iraq could upset the budget calculations and cause the government to do a rethink tax sops. It is also expected to take steps to cut the burgeoning fuel subsidy regime.
Predictions of a weaker monsoon, which could affect the country’s main kharif crops, are other worries for the newly elected government.