Political parties in power irrespective of their ideological bent being left, right or center tend to be judged on the electoral promises. The Narendra Modi Government which just completed its second year in office thus left no stone unturned to highlight its achievements. Every Ministry was directed to highlight the Government's achievements before the nation. The social media super-highway that the Modi-Government has so efficiently utilised witnessed packed traffic as the different Ministries took to social media sites to harp on achievements. Jayant Sinha, Minister of State for Finance, addressed the Twitterati on the occasion highlighting the achievements and shedding light on policies that aim to rectify flaws in the system. Policy Pulse presents the excerpts:
On transformation of economy
We have changed things drastically as job seekers are now becoming job givers. This is because of our policies and Pradhan Mantri Mudra Yojna. It has been very successful in the first year itself. We are adding people in large number in this scheme. This scheme is very successful because it does not require guarantee or collateral. This has helped new entrepreneurs in conducting smooth business. Interestingly, here Non-Performing-Assets (NPAs) are low. We are tracking loans given to people.
On black money and tax
We have taken some vital and important steps. We have done more than any Government has done. When we talk of black money there is a stock of money and flow of money. This year we have talked of presumptive tax in the budget which will help in ensuring better tax collection. We will come down heavily on those who do not declare their income within the compliance window. A penalty of 30 percent for foreign money and 15 percent for domestic evaders will be imposed. An effective surveillance mechanism has also been put in place.
As regards to black money in property markets, we have asked buyers to pay through cheques and credit cards so there is a transparency in transaction. We want payment by cash to be stopped so that black money generation could be checked.
We hope once GST comes into force then a lot of black money circulating through trade will come out. Congress is raising issues which are not practical and they are stalling this crucial bill. For example they want tax rates to be included in the Constitution. Tax rates are never included in Constitution. It is the Finance Bill through which Government decides quantum of taxes. This demand of Congress is utterly wrong. We are taking all steps to control the origin and circulation of black money.
We must appreciate Congress and UPA for preparing GST and we thank them for this but the way they are putting up obstacles now is deplorable. Till now we have not got any cooperation from Congress. We are trying our best and hope to get the GST Bill passed in Monsoon session. If passed it is going to be a revolutionary bill. It will change the way business is being done.
We have been working for a long time to redo the old Mauritius Pact. It has been a source of transferring black money. We will rectify the loopholes in the Mauritius Pact so as to check flow of black money.
Yes, I accept that our GDP-tax ratio is less than others. But it is a misunderstanding that only one percent of people pay taxes in this country. This year five crore people have filed returns. Our country have about 25 crore families and out of it 15 crore live in rural areas and they don’t have income to pay taxes. Even in the rest 19 crore, 2 crore are out of tax net because of low income. There are more than 18,000 individuals who are paying more than one crore rupees as income tax. We will see that small time businessmen with healthy earnings stop evading and start paying taxes.
People often complain of price rise. Mehangai (inflation) is a complex term and there are so many things associated with it. One aspect of mehangai is that at what rate it is increasing. People often compare today’s prices with five year old prices. When we see it from economic point of view then we see what your income is and what kind of life you are leading. As far as the prices of food items are concerned, during this period (May-June) production of many food items stop and prices tend to rise. There is a reasonable price hike but this year it is under control.
Also we are monitoring the essential commodities and their price movement very minutely. Prices under this Government are going up by four to five percent whereas under the Congress-led UPA the inflation was by 10-12 percent. We find that food prices have gone up a little but the situation is not that bad. We have been tough on hoarders and such elements.
We are solving problems which we inherited from the last Government. We are building a revolutionary social platform - Jan-dhan yojna is one such scheme. We are transforming rural economy through Pradhan Mantri Jan-Dhan Yojna, Fasal Beema Yojna etc. We are improving infrastructure of roads, agriculture etc.
On health of banks
We are curing the bad loan problem. We have asked banks to declare their NPAs. Government has taken bold and decisive steps to control NPAs with a host of preventive measures. Also if these are systematic lapses, then we have to make arrangements so that they don’t occur again in future. Responsibilities have been fixed in case of willful lapse and investigating agencies have been told to come down on defaulters with full force of law.
Another question is about consolidation of banks and we are working in this direction. If existing banks are consolidated then stronger banks will emerge. Weak banks cannot survive for long. It is a fact that banks with strong underwriting and recovery capabilities will fare well. Weak banks have larger NPAs and less money. If they are merged with strong banks their balance sheet would improve.