The Narendra Modi government has introduced the much-needed second generation reforms with several game-changing decisions over the last five years, said Finance Minister Arun Jaitley on Monday, cheering the GST introduction, saying it will increase the assessee base in the first twenty-one months of its implementation by almost eighty percent.
In the taxation reforms and black-money steps, he said the last five years will be considered momentous.
"No taxes have been increased. In fact, after 67 years of increase, tax rates have moved downwards. In a bold step, spread over five years, the income up to Rs 5 lakh has been exempt from income-tax. Even deductions available to the taxpayers have been raised to encourage and incentivise savings," he said.
The Goods and Services Tax has enforced one tax across the country, eliminated barriers and made inspectors disappear. The number of assesses filing returns with reduced tax rates in income-tax has risen close to double in the five year period, he said.
The GST will increase the assessee base in the first twenty-one months of its implementation by almost eighty percent, the minister said.
The minister highlighted many steps that the present government has taken in taxation reforms, to curb black money, enactment of Insolvency and Bankruptcy Code, demonetisation, steps to check inflation, promoting cooperative federalism, Ayushman Bharat scheme, social sector investment and infrastructure development. These, he said, were game-changing decisions.
The first NDA Government took key decisions on infrastructure creation and prudent fiscal management. Bold policies on telecom and national highways made significant impact on the economy, he said.
Jaitley said the economy expanded at a rate faster than any other country in the world. "Our revenues went up and we ensured that the benefit of prosperity and the first right to the exchequer go to the poor. It will be our endeavour to maintain this direction in future also".
Launching an attck on the UPA government, he said between 2004-2014, the UPA got stuck into slogans rather than economic expansion.
They created 'rights' without a major increase in resources being provided to implement those rights.
"The Government got mired in corruption and wasted its tenure in a coverup exercise. Prime Minister Modi's Government was elected when India was already a part of the 'Fragile Five' and the world was predicting that India's 'I' will be knocked off from the aBRICS'. The Government had no options. It was committed to reforms. 'Reform or Perish' that was the challenge before the Indian economy," he added.
The Finance Minister said the Insolvency and Bankruptcy Code changed the debtor-creditor relationship. "Defaulting managements are removed from management and debtor companies are going in for resolutions with either new promoters taking over or by sale of assets. Banks have finally started recovering their bad debts. No one can cheat the banks and get away," he said.
He said demonetisation compelled people to deposit their high currency cash into the banking system, account for the deposits by paying taxes or otherwise.
"It brought a behavioural change in how India spends its money. The real test of the demonetisation is: has it led to higher tax collections and higher digital transactions?' The unequivocal answer is 'Yes'," he said.
"Five year is not a long period in the life of a nation. It can, however, be a turning point in its direction for progress," he said and added the year 1991 was an important watershed in Indian history.
Continuing his 'Agenda 2019' series of blogs, Jaitley said the then Prime Minister P.V. Narasimha Rao was confronted with an economic crisis. The economic situation compelled reforms.
"Many in the Congress party lacked the conviction to support reforms. After the initial two years from 1991-1993, the Congress became apologetic about the reforms. That is probably the reason why the efforts to erase the memory of Shri P.V. Narasimha Rao from Congress Party's contemporary history is still work in progress," he said.