‘Big Bang’ reforms in India: Top 5 things FM Arun Jaitley said

Finance Minister Arun Jaitley is optimistic about India’s growth prospects and believes that PM Narendra Modi-led government is undertaking ‘critical reforms’ in the country to kick-start the moribund economy inherited from the UPA government – the Bharatiya Janata Party (BJP) had vowed to trot out standout economic reforms during the general elections, but some rating agencies have panning the NDA government for its inability to do so. The government has taken a series of incremental reforms, which taken together are much more than Big Bang, Jaitley declared. We take a look at top 5 things Jaitley has to say about the ‘critical reforms’ under way and in the pipeline:

1. “We are seeing an important phase of structural reforms. Each of the steps, whether in direct tax, indirect tax, FDI reforms, auction rather than discretion – each one of them is a big-bang step and when the history of reforms is written, post-1991, irrespective of what happened in 1991, this will go down as the most important phase of reforms,” Jaitley said in an interview to a business daily.

2. According to Jaitley, “One of the great successes have been that today India doesn’t face opposition to reforms, that’s because India is becoming more aspirational, people are feeling the benefit of reform process and carrying that section of opinion along with you, I think, is a big challenge which we have succeeded.”

He said the government is dealing with stressed sectors separately and that will help clean up balance sheet of the banks.

“In next one or two quarters, balance sheet of steel companies will start looking better…. As global economy improves, you will start seeing impact on bank balance sheet,” Jaitley said earlier this week.

3. Jaitley has recently said there have been significant movements, which have taken place in infrastructure sectors including power, oil and gas sectors. And government is trying to put resources in infrastructure, agriculture sector and rural India where it is needed the maximum.

“You don’t have now to lobby with ministers for policy or for natural resources… So that’s a clean transparent that we have introduced,” he has said.

“I think this government is yet to commit its first mistake as far as the economic policies are concerned. All steps, which are taking place are in one direction and slowly and surely you are moving in that direction carrying the democratic opinion along with it,” he said.

4. As far as taxation, Jaitley said that the government has started to make India’s taxation globally competitive.

“On the individual taxation side we are are much better off than most developed parts of the world. Our rates are much more reasonable and attractive,” he said.

Jaitley said corporate tax also is being made as one of the attractive one in the world and work on rationalisation of direct taxes is on and in right direction.

5. Asked about his take on RBI governor Raghuram Rajan’s view that India is poised for a fresh take-off, Jaitley said, “See, we have reformed, we are spending more, we are spending in the right direction and we are sticking to fiscal prudence. So, we are doing all the right things in… a global environment, which is not (otherwise) friendly.”

“I think the economy is picking up. We can certainly see a booming service sector, we can see improvement in the manufacturing sector, a lot more activity in the mining sector, and I am sure if agriculture does well, it will leave an impact,” he added.