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With just about a week to go before he presents his government’s fi rst Budget, FM Arun Jaitley takes to the media to send forth a strong signal that his July 10 Union Budget will shun populism, averring that ‘mindless giveaways’ would not only burden the exchequer but also lead to a high-tax society. Even as much data & expertopinion point at how quick economic recovery is at best an uncertain hope, and fi scalchallenges prove to be but tips of icebergs, Jaitley hinted that government could soft en its tax administration, oft rightfully blamed for undermining India’s business-friendly environment. NRI Achievers brings you this report …

PM Minister Narendra Modi had earlier on taken to the social media to caution all and sundry that there is no gain without pain, and that government will have to perforce prescribe some ‘bitter medicine’ for the ailing Indian economy, if it is to rebound on the long term to become a healthy and vibrant player in the world economy. He warned of tough measures that need to be resorted to, in order to improve the country’s financial health. To be read as: Government will raise fuel prices, cut subsidies and reduce wasteful spending. Tough times demand tougher measures …

Arun Jaitley, Minister of Finance, speaking at the Institute of Chartered Accountants of India this week, took the opportunity to send out a stern warning that the country could ill afford to resort to popult measures under the circumstances, where we are saddled with an economy growing at less than 5%, and are in the clutches of a high fiscal deficit and galloping inflation: “Th at is a trap which will be diffi cult to get out of,” he opined, adding that the poor monsoons, coupled with the rise in oil prices brought about dur to the Iraq crisis has made the government’s task even more diffi cult. While it was fondly believed in the past that sops and populist measures are a surefire method to garner votes, state elections of 2013 and general elections of 2014 have proved otherwise, according to the FM: “Therefore, if you indulge in mindless populism, you burden the exchequer. You expect the FM to impose higher taxes. You expect him to reduce the spending power in the hands of the consumer. You want him to tax every activity of life. You convert yourself into a high taxation society so that you can indulge in populism. It simply does not work,” he asserted. Batting on the side of financial prudence as the first step towards responsive governance, he pointed out that the rewards of fi scal consolidation would come sooner rather than later: “If you follow the path of fi scal prudence, and have a certain amount of discipline, I am sure we don’t have to wait for the next generation to get the benefi ts of what we do today. Very soon you would see the benefits yourself,” Jaitley said. Reiterating the fact that phrases like ‘tax-terrorism’ and ‘policy-paralysis’ had become part of the vocabulary describing business environment and governance in the country, he pointed out that there is a dire-felt need to adopt a tax regime that will allow businesses to grow: “You have a loss of credibility in the Indian economy. The fact that the world suspects we don’t have a stable tax regime itself has dissuaded investors …

Cumbersome legislations scare away investors,” Jaitley said. Having said that and more, the Finance Minister was however hopeful and on an optimistic note indicated that the government will do more to attract investments: “India has come back on the agenda of foreign investors … Our doors have to be opened up for investment in all those sectors that will create jobs,” he said, adding that there was indeed hope that bold decision making will make possible.

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