Retrospective tax brought a bad name to India: FM

'Civilised tax regime helps investments'

Retrospective tax brought a bad name to India: FM

Contending that the retrospective tax has brought a bad name to India, Finance Minister Arun Jaitley on Wednesday said that the government was working towards making the tax regime “civilised” to attract more investments into the country.

“Retrospective tax has only brought bad name to India instead of garnering more taxes,” Jaitley said in the Lok Sabha while replying to a debate on Supplementary Demands for Grants for an additional expenditure of over Rs 12,500 crore this fiscal. It was later passed by the House.

Retrospective amendments to bring under the tax net cases such as the Vodafone-Hutchison transaction have drawn widespread criticism in the past from the investors.

Jaitley said, a large number of investments were waiting to come, provided the government opened the doors apparently referring to the report of the select committee endorsing the insurance bill, which seeks to raise the investment cap in the insurance sector from 26 per cent to 49 per cent.

“The FDI regime has already been relaxed in the defence sector and has generated a lot of interest from top global manufacturers,” he said, adding that India needed to open up in insurance too to bring in overseas money in starved sectors, such as health.

“How long are we going to remain a country which does not have adequate health insurance. Forget other forms of insurance... LIC can take care of life insurance, but you need to expand these sector... the public health system is not adequate,” he said

“A very large investment in this investment-starved sector of insurance is waiting to come in,” the Finance Minister said.

The Parliamentary Select Committee on Wednesday approved the bill to amend the Insurance Act. In its report to the Rajya Sabha, the committee also gave a nod to a composite foreign investment cap of 49 per cent.

The composite cap refers to clubbing of foreign investment by strategic and portfolio investors.

Empower states
Advocating greater powers for states, Finance Minister Arun Jaitley said a principle of 'cooperative federalism' is being followed in setting up the new body in place of Planning Commission.

"Our government stands by the principle of cooperative federalism, empowering states, least number of central schemes and more state schemes," Jaitley said while replying to a debate in the Lok Sabha.


Advocating more autonomy for the states, the finance minister said: "...allow states to rule...because they have as much mandate to rule their states as much as we have to rule Delhi. We will maintain the spirit of cooperative federalism."
DHNS & Agencies

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