Govt to unveil 2nd generation reforms in next Budget: FM

New Delhi: Country needs a larger opening out in more sectors and a stable policy and tax regime, said the Union Finance Minister Arun Jaitely.

Speaking at an interactive session at PTI headquarters on Sunday, Jaitely said that a whole set of second generation reforms will be unveiled in the next Union Budget and promised ‘lot of exciting time ahead’.

The country require “a larger opening out in more sectors,” and it requires stability of policy and tax regime besides a “reasonable” cost of capital, he said adding that once the effect of all these steps fructify, the GDP growth will cross 6 per cent expectedly in 2015-16.

“And there is a whole set of reforms which have arisen because some undoing is required. The coal ordinance is one undoing thing. Allocation of natural resources by non-discretion is undoing thing. A rational and reasonable tax regime is undoing thing. Some procedure changes in the land (acquisition) law an undoing,” the minister elaborates.

And he said his immediate target will be insurance amendment bill, coal ordinance and the GST bill. “I am simultaneously looking at the other big mineral allocation, introducing a non-discretionary basis...Then I have indicated the land laws.

Some dilution is required because this law can actually make development stagnant. I have no difficulty in higher compensation. I welcome it. But no access to land means what happens to infrastructure, townships, housing, industry and jobs,” he said.

On banking sector reforms, Jaitley said under Basel-III norms, government stake in all PSU banks will have to be brought down to 52 per cent and the rest is to be used for financial inclusion.

Enumerating the steps taken by the NDA government in the last six months, he said, “It will still take some time before results start surfacing. On the ground some green shoots are visible.”

However, he agreed several more steps are required to create more positive environment not only by the Central government but also by the state governments include the Opposition parties.

Jaitely said that the investors require more indications like stability of policy, stability of tax regime (and) correcting whatever major aberrations have taken place.

Revealing his thinking on reforms front, the minister said the infrastructure needs access to capital (as well as) locked up money in disputes will have to be resolved.

And, if the government is unable to provide cheaper capital, then opening out alone would not help. “So, it is a chain of events which has to take place.”