New Delhi

With a number of key reforms bills stuck, government today appealed to the opposition not to play “obstructionist” as the country has the “historic opportunity” to grow and the GDP is expected to go beyond 8 per cent next year, overtaking China.

Finance Minister Arun Jaitley also rejected the charge that the government is pro-rich as it had proposed reduction of corporate tax from 30 per cent to 25 per cent and sought to take the battle to the Congress camp, saying he had borrowed the idea from Direct Taxes Code prepared by UPA’s Finance Minister P Chidambaram.

He strongly justified the government’s quest for opening more sectors for foreign investment, saying more and more funds are required to create jobs, develop infrastructure and undertake social welfare programmes.

In a veiled message to RBI, Jaitley also made a case for reduction in interest rates, warning that the growth will otherwise suffer.

He was replying to a debate in Lok Sabha on Appropriation Bill which was later passed by a voice vote, thus completing the first phase of the budgetary exercise in the lower House.

“This is a historic opportunity where India has real chance of growing. The world also sees India as a bright spot.

We must use this opportunity,” the Finance Minister said, adding “I appeal with folded hands… let politics of obstructionsim not go to next stage.”

While talking about the “historic opportunity”, he said, “Do we go on this course. How can I obstruct this growth?”

He said the global economy situation suits India as Brazil faces challenge, Europe has slowed down and China’s 7 per cent is new normal. “IMF says India will overtake China,” he added.

Jaitley’s comments assume significance as some key economic reforms legislations like Land Acquisition Bill, Coal Bill and Mines and Minerals Bills are stuck in Rajya Sabha.

Jaitley defended the move to reduce corporate tax from 30 per cent to 25 per cent over four years, saying it was necessary to create a competitive climate so that investors are encouraged to pump in funds.

The effective tax rate is 23 per cent globally, 21.9 per cent in ASEAN nations and 19.66 per cent in Europe, the Finance Minister said and asked “Who will invest in India if tax is 30 per cent.”

Targeting Congress for its attack over the proposal to reduce taxes for corporates, he said, “I must confess this was not my original idea. I borrowed it from UPA.”

He said the proposal was first made in the DTC by then Finance Minister P Chidambaram. “I said it is good idea because in rest of world, it 21 per cent…But when I bring it, Congress says it is pro-corporate.”

Although the tax rate was 30 per cent, the actual realisation worked out to be only 23 per cent because of certain concessions provided to the corporates over the years, Jaitley said.

The government, he added, would remove the exemptions while gradually reducing the corporate tax rate from 30 per cent to 25 per cent.

Responding to members who said nothing has been given to the middle class, Jaitley said the government has given exemption to income tax payee to the tune of Rs 1,70,000 in two budgets over the last one year — Rs 1 lakh last year and Rs 70,000 this year.

Also tax exemption has been granted to the investment of upto Rs 50,000 for pension. “Effort is to create pensionless society into pensioned society,” he said.

On abolition of Wealth Tax, he said an additional surcharge of 2 per cent on super rich has been imposed which will yield the exchequer an additional Rs 9,000 crore anually.

To the attack for not passing the entire benefit of fall in crude oil prices to the consumers, Jaitley said petroleum prices were cut 11 times. However, the entire benefit could not be passed on to the consumers as oil PSUs could not be allowed to “die” as they were suffering losses to the tune of Rs 30,000 crore on inventory, he said.

He added that money that the government saves is diverted to highways and railways, which are key drivers of the economy. .

Justifying the government’s decision to open up more and more sectors to FDI, Jaitley said the country needs investment which “will lead to jobs, will lead to profitability. It is that money that will create jobs, will help us create infrastructure.”

Addressing the opposition parties which are blocking some key reforms bills, the Finance Minister said, “it is important to understand for those political parties which have adopted obstructionism as their strategy… You prevent economic decision-making, investment, revenue, jobs and infrastructure.You want to perpetuate India as a poor country.”

He asserted that the government will not let it happen as “first thing we need resources”.

This provoked angry protests from Congress benches.

Taking a dig at them, Jaitley said, “Why do you think the cap fits you? I did not name you.”

Referring to the issue of black money, Jaitley said the government would bring a new legislation in the current session of Parliament which would have provisions like 300 per cent penalty and punishment up to 10 years for concealing overseas assets.

Noting that 162 members had spoken on the budget, he said no one among them spoke about corruption, reflecting that the word ‘corruption’ has gone out of the discourse.

Talking about coal sector, he said his government believes in auction. In this context, he said the then Prime Minister Manmohan Singh also wanted auction coal blocks in 2004 but could not implement the proposal till 2014.

“We should learn the lessons” and “there should be no situation that a court summons a former PM”, Jaitley said in an apparent notice to Singh by a Delhi court in connection with a coal block allocation scam.

He said auctioning of coal blocks will help states earn more revenues.

On concerns expressed by some members that states would lose their share in devolution of taxes following implementation of the recommendations of the 14th Finance Commission, he said it was not possible as the overall outgo towards states would increase by as much as Rs 1.86 lakh crore in 2015-16.

The Centre would consider the cases brought before it by the state governments, he said, adding “it has not been the practice of the government to reject the recommendations of the Finance Commissions.” The 14th Finance Commission was set up by the UPA government.

PTI