Finance Minister Arun Jaitley said the government faces a major challenge in marketing reforms in the country, which has a large mass living at subsistence levels while speaking on the issue of foreign equity in India on Wednesday in New Delhi.
In the question and answer session at the India Economic Summit, Jaitley said, “In a country where 30 percent of people are living below the poverty line, your reforms cannot be one that you simply confront public opinion, or the sectors that you simply find a huge amount of reluctance for reformation.” The minister said that for a government to market reforms to them are very challenging. Adding, “That debate has to be continuous.”
Meanwhile, the finance minister cited the example of the defence sector where the foreign equity ceiling has been raised to 49 percent from 26 percent by the new NDA government when he said that the reforms process in India has to weigh the requirements of each sector.
“This was accompanied by a big debate on the benefit (of raising FDI in defence) on Indian society and I can see the ripple effects already,” Jaitley said.
He said, a defence sector have been recently opened up. He said, “It was always considered very sacrosanct in India. As a result, we became only buyers.” He continued, India had fallen off global radar over last 2-3 years. Buzz around India is back.”
However, accepting that the allegations of crony capitalism were true (under last government), Jaitley said that the element of fairness in the system was lacking. He has also mentioned that the retrospective tax as a bad idea which damaged the economy.
The minister said that the taxpayers can’t continue to pay for loss-making businesses. He said, “We will continue on path of divestment. Will look at some Public Sector Units that may do better in private hands.”
(With inputs from IANS)