Social Stock Exchange will help social enterprises & voluntary organisations to raise capital: Anurag Thakur
Union Budget 2019 provides the roadmap to be a 5-trillion-dollar economy and glimpse of how next 10-years is going to be, says Anurag Thakur, Minister of State (MoS) for Finance and Corporate Affairs, during an interview with Zee Business.
Union Budget 2019 provides the roadmap to be a 5-trillion-dollar economy and glimpse of how next 10-years is going to be, says Anurag Thakur, Minister of State (MoS) for Finance and Corporate Affairs. During an interview with Swati Khandelwal, Zee Business, Mr Thakur also said, “special cess on diesel and petrol were increased as the crude prices have softened from their highs and the year’s economic survey suggests that the prices are going to be across the year. Edited Excerpts:
Q: The budget is propelling India’s growth and make it a $5-trillion economy by maintaining the fiscal deficit. So, how the government will achieve it?
A: In the last five years, the fiscal deficit has been brought down to 3.4% from 4.5%. Similarly, the inflation rates which stood at 11-12% under UPA regime has been restricted to 3-3.5%. This is an impeccable achievement of the Modi government. Along with it, we became self-dependent in several sectors including agriculture.
When it comes to how we will be a $5-trillion economy in the next 5 years, then the budget is providing a roadmap for the next 10 years. It talks about the ways to encourage investment and how foreign direct investment (FDI) can be increased. As far as job creation is concerned, then it is also talking about how it will happen through employment, self-employment and business. Growth in different segments will bring improvement and you will be able to see it. For example, Pradhan Mantri Gram Sadak Yojana talks about building 1.25 lakh kilometres of the road in the rural area and 1.95 crore houses will also be developed in the area. Apart from this, it is also encouraging towards the zero-budget farming in agriculture and several segments have been brought under the ambit of pension-like labours, shop keepers and traders. Similarly, Pradhan Mantri Kisan Samman Nidhi Yojana (PM KISAN) has been introduced for the farmers and ample money has been allocated in the social sector. In addition, the government is also trying to encourage investment in the infrastructure sector, which needs Rs100 lakh crore and it will be brought through a PPP (public-private partnership) model. That is why it is talking about FDI and FBI and it will be done in time to come.
Q: How you will change the pattern of consumer demand that is going through a slowdown since last one year. What steps are needed to change it?
A: Increase in government spending is beneficial. Secondly, have a look on other things like housing sector where deduction on the interest paid on loans for affordable housing has been raised Rs3.5 lakhs for houses valued up to Rs45 lakh will definitely give a boost to the real estate sector. Thus, strengthening of the real estate sector will also give a boost to the linked industries like Cement and Steel among others. Similarly, when money comes in the farmers’ pocket then he will not keep it with himself but will put it in the rural economy, i.e. the money will come back to the cycle. The income tax deduction of Rs1.5 lakh on the interest paid on the loans taken to purchase electric vehicles will save your money, which can be utilised in something else. Thus, industrial growth and investments will bring money in the market which can be used in developing the nation. In short, increased income will increase consumption.
Q: Special cess on petrol and diesel is a surprise element and is a blow for the common man. What is the logic behind it?
A: If you have a look at the international crude prices, which keeps changing at regular intervals. But, the taxes were slashed on them by both the central and the state governments when their prices were quite high. The taxes were slashed to give relief to the common man. However, crude prices have softened from their highs and the year’s economic survey suggests that it will remain stable across the year and that is a reason that we decided to add new cess on the fuel.
Along with it, there is a need to strengthen your base and give a boost to the infrastructure sector. So, if the base turns up to be strong and enters into different sectors then it will boost investment in infrastructure then it will lead to job creation and propel growth rate. If you are thinking about New India’ for any sector, then it is very important to invest in their infrastructure. For instance, 100 clusters will be developed, might seems small to you, but it will give a boost to traditional artisans and benefit to more than 50,000 people. Incubation centres will connect about 75,000 rural population with the technology and better economy.
Q: Talks are out that this cess can be increased if the declining trend in crude prices continues in years to come?
A: Not at all. I think if they wished then they wouldn’t have done it, but public participation is needed to take the country forward. For instance, Swachh Bharat mission was not launched just because the government had money but had the support of people. Similarly, the government would have not given a subsidy of Rs100 while distributing the gas cylinders to support women of the nation, but it reduced the prices. Interestingly, the prices were not brought down due to pressure from the opposition or the media, but it gave relief to people and will continue supporting people whenever it gets an opportunity to do so.
Besides, if you have a look at the inflation rates then it is the same government who has kept its rate to the lowest in the last 5 years. So, you must not combine everything with petrol and diesel because the overall inflation is very low and under control. I think it must not be restricted to fuel, petrol and diesel, but one should have an overall look on the same.
Q: Taxation is an important part of the budget and it was believed that some concessions will be provided to people with an annual income of Rs5 lakh, but it didn’t happen. Would you like to say anything on it because it is a story of the honest taxpayers and how they will be rewarded?
A: First of all, I am thankful to the taxpayers, whose number has gone up from 3.5 crores to around 7 crores in the last 2 years. It has happened because people had faith in Prime Minister Narendra Modi and the country. But, just 6.8 crore people are paying taxes in a country of 130 crores. If you have a look at the direct and indirect tax, then you will get a clear picture of the corporate world’s share in it. So, we are also working in the direction to improve tax control. We are also moving ahead in terms of asset monetisation so that we can generate more revenues. Apart from this, the government has also increased its investment in social welfare schemes in the social sector.
Q: The government has announced that a social stock exchange will be developed where social enterprises will be listed.
A: Several people came to us to inquire about the ways to raise money and I think that it is a good idea in that area.
Q: Super rich have been taxed. But did you have any discussion on inheritance tax, which was abolished in 1985, and is there any chance to bring it back?
A: I think, the decision has been taken where opportunities or possibilities were visible.
Q: Although you have spoken about the NPA and the improving conditions of banks, some problems persist. The NBFC’s concerns have been precisely addressed. When do you think the results will improve in this sector after the announcement?
A: The way loans were sanctioned during the UPA regime has raised its quantum from Rs18 lakh crore to Rs55-56 lakh crore. In fact, repayment and cleaning of the balance sheet was a tedious task, but we have worked a lot in the last two years. In addition, the introduction of the insolvency bankruptcy code has played a major role in bringing back about Rs3 lakh 60,000 crores to the banks. In the last few days, you would have seen that actions were taken on certain (1 to 2) companies to bring back more than Rs1,000 crore. So, the government has introduced regulations and acts at places of need, took strategic steps to clean and clear the balance sheet of the banks. In addition, the government has also infused capital. In fact, in budget 2019, it has also talked about investing Rs70,000 crore in Budget 2019, which will have an impact on the NBFC sector. There will be a credit availability and putting RBI as its regulator is also be a helpful step.
Q: GST collections have stood at an average of around Rs1 lakh crore every month. Can you tell us the time by when this average will go up and the process that will be adopted for it?
A: See, no country in the world has not been able to stabilise GST in such a small time. We have heard almost every voice and the GST council has played a very important role in its implementation and every decision was taken in consensus, which is a big deal. I think it has happened just because only 43-45 items are present in the 28% GST bracket and others have moved out to lower brackets. In addition, the government has given a relief of Rs92,000 crore to taxpayers in the last one year and if it is calculated then the tax revenue will automatically go up. But, we are going to be tuff against the issue of fake invoices and tax evasions. In addition, technology will be used to give more reliefs to the business class, so that the process of filing of tax returns in GST becomes simpler. It will help us in strengthening our base.
Q: What is your view on the proposed public shareholding of 35% which will ensure an increased supply of equity shares of around 3 lakh crores in the market?
A: There are two aspects, the first is that the government has said that SEBI says that 25% of holdings should be public it also includes the public-sector companies and we will take steps there too. This year’s asset monetisation target has been kept at Rs1.05 lakh crore and it will be achieved. Apart from this, we have taken the decision on the ways to bring foreign direct investment (FDI) in different sectors. Besides, quality companies should be available in India, which is not present in huge numbers here. So, we have requested State Bank of India (SBI) to increase it from 25% to 35% and if it happens then it will benefit the company, the market and overall the country.
Q: Banks have been a merger to strengthen the banking system of the country. What is your take on it?
A: Going by my experience, I think that good steps have been taken in the direction. Future merger decisions of merging one bank with the other will depend on analysis of feedbacks and it includes, what is good with the merge, what is the market strength and weakness and opportunities.
Q: Any bank merger plans for the year?
A: You will be informed when the government will be in a position to take such decisions. We took time in deciding the previous merger for instant Bank of Baroda with Vijaya Bank and Dena Bank because each of them had a size, a market, people to work and a system. So, work ethos and other issues are taken care to consolidate them.
Q: Study, PSU Asset Monetisation, has been completed. Can you provide the figure (amount) that can be created by monetising the surplus assets?
A: The data will be shared with you. The government is very clear on the aspect of disinvestment, undoubtedly, the government will be the controlling body of those entities. It has created an annual target for disinvestment and has been achieving it to date. For instance, this year’s disinvestment target stands at Rs1.05 lakh crore and the government will be taking essential steps that are needed for the purpose.
Q: A big budget has been allocated to the infrastructure sector in the budget 2019. So, how soon, we will be able to commence work on the segment?
A: Confidence and stability come hand-in-hand with the formation of a new full majority government. And, I think, the confidence will give a boost to domestic as well as foreign investors, who will have faith in our market. This year’s budget was not announced with an aim to please someone, but it was planned to take the country in a new direction so that ‘New India’ is created. It was a budget for New India’ and set a path to turn India into a 5-billion-dollar economy. However, relief was granted to a section, but few essential steps were taken to take the country ahead where every citizen is benefitted.