New Delhi, May 5: The central government on Thursday,May 5 outright rejected suggestions from some opposition members to bring agriculture income under the tax net, saying this is not being considered at all.
He maintained that it can do much better, provided there is a good monsoon and the government is able to address the vexed issue of non-performing assets (NPAs) of banks.
"Vishwa ke tulna mein hum sabse aage haen (in comparison to the rest of the world, we are far ahead)," Jaitley said.
"After two years of drought, if the forecast of better monsoon rains this year holds good, it will improve agriculture," he said.
The minister said a good monsoon will add to the rural economy and thus the economy - which had been expanding on strength of public investment, the highest foreign direct investment (FDI) and urban demand - can only grow faster.
He pointed out that despite the global recession and uncertainty prevailing on how long the crisis will remain, India still continues to maintain a high growth rate at 7.65 percent in 2015-16 compared to 7.2 percent in 2014-15.
On the suggestion about introducing tax on agricultural income, he said that, firstly, large farm-based income was rare and people using agriculture as a front to hide income from other sources need to be dealt with by the tax authorities.
But he said under the federal structure, the state governments have the power to impose such agricultural tax and counselled Biju Janata Dal floor leader B. Mahtab that it will be ill-advised for the Odisha government to do so.
During the debate on the Finance Bill on Wednesday, Mahtab had asked: "Does it make any sense providing support to the big farmers, not taxing the agriculture produce of the farmers is one thing but not taxing the companies who are earning thousands of crores of rupees?"
Even Trinamool Congress member Saugata Roy had said that rich farmers should be brought under the tax net to widen the tax base.
On the issue of one percent excise duty on non-silver jewellery, the finance minister ruled out its rollback, saying the levy was not applicable on small traders and artisans. Only those jewellers with more than Rs.12 crore turnover will attract the duty, he said.
Jaitley conceded that bad loans are an issue and the NPAs of banks remain a matter of concern for his government.
"I would not like to go on a blame game on this. But, we cannot solve the problem of NPAs by hiding it," Jaitley said, stressing that the government is taking steps to bring the banks out of the NPA mess.
He maintained that loans that have been lent without proper due diligence will be investigated, and said NPAs need to be reflected in the balance sheets and subsequently addressed through capitalisation.
He flayed the Congress party for supporting the United Front government's Voluntary Disclosure Scheme (VDS) in the 1990s, saying it was "an ill-advised scheme" and was "discriminatory against honest tax payers".
"I am surprised that Mr. Veerappa Moily (Congress) said this is a highly successful scheme," he said referring to the VDS launched in the mid-nineties when P. Chidambaram served as the finance minister under prime ministers H.D. Deve Gowda and I.K. Gujral.
Jaitley also took a dig at the Congress, and said: "I have not been able to understand the politics of hatred for 'suit' but love for gold".
This was in reaction to Congress opposing the levy of excise duty on gold and other jewellery.
"If the Congress had objections to the levy, it can begin by removing the 5 percent VAT in Kerala where it rules," he said.
Responding to criticism that government's steps have often been against people-oriented schemes, Jaitley said: "In all the three budgets this government presented, we tried to ensure that small tax payers have more money in their hands."
The Finance Bill now goes to the Rajya Sabha, which has to return it and only then the budgetary exercise for 2016-17 will be completed.