New Delhi: Indicating that his maiden budget next week will not indulge in ‘mindless populism', Finance Minister Arun Jaitley today said the government would take bold decisions and pursue path of fiscal prudence to revive economy.
Listing out the challenges before the country, he said fiscal deficit is high, inflation is beyond acceptable limits and the fallout of Iraq crisis looms large on the economy.
“If you indulge in mindless populism you burden the exchequer...you convert yourself into a high taxation society. It does not work. Therefore if you have to follow a path of fiscal prudence, (you should) have a certain amount of discipline,” Jaitley said.
Addressing a function of the Institute of Chartered Accountants of India (ICAI), he said the rate of inflation compared to last year have somewhat come down but was “still beyond the acceptable limits.”
Inflation rose to five-month high of 6.01 per cent in May and there is likelihood of prices moving up further in view of predictions of below normal monsoon. Referring to investment scenario, Jaitley said that after three-four years of pessimism there is hope and now “bold decision-making” is possible.
He further said: “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.
“Just as policy paralysis was unknown to our governance vocabulary, the other new addition which I have been reading comments from independent observers...is tax terrorism.”
Observing that India fell off the global agenda, he said, now an interest in the country has suddenly emerged. “The responsibility now lies on us to respond to this new opportunity that has come before us,” he added.