Finance Minister Arun Jaitley on Friday hinted at not raising tax rates, and providing incentives for manufacturing in the coming Budget, while asserting that “structural changes” will have to be made to get the economy to 8-9 per cent growth.

Hard selling India to global investors at the World Economic Forum here, he also promised a stable tax regime that will not come up with unreasonable demands and change taxes retrospectively.

“In terms of incentivising manufacturing, it is very much on our agenda. Even though we had few days during the last Budget we did give to Ministry of Micro Small and Medium Enterprises (MSME), National Investment and Manufacturing Zone (NIMZ) and so on because we wanted the sector to pick up and that priority is fairly high on our agenda,” he said speaking at a session on ‘India’s Next Decade’.

Referring to revenue sources for the Centre, including divestment, dividend and spectrum sale, the Finance Minister said as economic activity picks up, the Centre’s capacity to raise revenue will also increase.

“I am not in favour of raising the rates of taxation as that could become counter-productive,” he told reporters.

Jaitley expressed confidence that India was close to the point when investment would pick up as there are a large number of investors waiting to come in.

“They only want to be doubly sure about the credibility of the decision-making process and the stability of policies,” he said.

Budget expectations

As expectations continue to build up on the first full Budget of the Modi government, Jaitley said the sum total of the reform measures and other policy initiatives already taken would be much more than “the big bang”. “I am not going to be swayed by these phrases that are used in television studios. If you take the sum total of all the steps we have already taken, it will be much more than the big bang. Even big bang looks small in comparison,” Jaitley said here on the sidelines of the summit.

Asked if he was tempering expectations, the Minister said: “I am not tempering expectations. Opening up sacrosanct sectors like Railways, Defence, is that not big bang? GST, which everyone thought will never see the light of the day, is that not big bang?

"In the mining sector, in allocation of natural resources, what we have done, is it not big bang? These are steps which our predecessors had failed to take. The Budget will be a very important occasion for this government, but then the next 364 days are equally important.”

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