Committing to more reforms and eliminating corruption, Finance Minister Arun Jaitley on Wednesday said steps taken by the new government were aimed at creating fair and transparent business environment and ending crony capitalism.
The government was also looking at areas like labour reforms, privatisation of some state-owned companies and improvement of land acquisition laws, the minister said, while adding that the reforms can't be just ‘one sensational idea’.
"You can damage the economy by one bad idea. Retrospective taxation is one bad idea that damaged the economy," Jaitley said while speaking at the India Economic Summit in New Delhi.
Recalling the steps taken by the National Democratic Alliance government to deal with coal block allocation problems, Jaitley said, as a result ‘the element of discretion in the hands of the state has almost disappeared and hence once you take decision of these kinds (it will) eliminate the possibility of corruption, collateral consideration or crony capitalism as you call it.’
The investors, he added, could look for a system "which is fair. Not a system on which they have to entirely depend on the largesse of politicians and ministers."
Similar reforms, he said, would be undertaken for allocation of natural resources and other minerals.
Reforms, Jaitley said, "is a long journey. Some people expect that the second generation of reforms in India really needs one or two big bang ideas that probably is not the answer.
The Minister said that merely undoing wrongs of past would not cure all our problems.
"So we began on a journey and I believe that the pit was reasonably deep. And, therefore, rectifying it will require a lot of time".
The Summit is being organised by Geneva-based World Economic Forum and industry chamber CII.
Elaborating on steps to deal with corruption and crony capitalism, Jaitley said that those who administer the country would have to change their mindset.
"We are attempting (to change the mindset)", he said, adding that the decisions taken by the new government in the last five-six months were aimed at eliminating any possible discretion.
Noting that crony capitalism was witnessed in the past allocation of natural resources like coal blocks and spectrum, Jaitley said the new government came out with an ordinance on coal with a view to end discretion and introduce fairness in allocation of the fuel.
"The actual users (of coal) get it by a process of e-auction and thereafter if the government desires, it will open it up for commercial mining. I can tell you with regard to other minerals we are about to undertake a similar reforms," the Minister said.
Asked whether he was satisfied with the pace of reforms, Jaitley said, "I am quite satisfied with the beginning that we have made. . . in the next few months. . . I think the effects within the country would also start showing."
Admitting there were challenges, the Minister said, the country needed to doggedly pursue the reforms agenda.
"There are bound to be some hurdles, one need not get unnecessarily upset about them.
"There are a lot within the present political framework and the government's framework that can be done. . .but one thing that is clearly borne in mind is that no steps should be taken that sends contrary signals.
"Therefore with all kinds of ideas, big and small, one has to pursue in one direction and that's what the present government is trying to do and I am quite certain that its only a matter of time that the ground results start reflecting on the cumulative effects of these steps," he added.
Image: Finance Minister Arun Jaitley. Photographs: Danish Ismail/Reuters
