He also indicated that his upcoming Budget will not resort to “sheer populism” for good ratings, but will focus on structural reforms. He hoped that the Congress will “see reason” and help pass the Goods and Services Tax (GST) Bill.
“Prime Minister had a valid point and the valid point is at the end of the day, the government per se is not against the concept of subsidies,” he said while speaking at The Economic Times Global Business Summit here.
With 25 per cent of the people below poverty line, a very large section of population is entitled to cheap food while the farm sector stress too has to be supported.
“If you look at the whole structure of the Indian economy, its agriculture sector, particularly in the last two years due to the poor monsoon, has been stressed. Therefore, you need to put funds in that particular sector. Therefore, there would be targetted subsidy,” he said.
Jaitley said the prime minister had yesterday stated that subsidies are being rationalised and not abolished.
“I think that is the correct statement. They must be targetted to people who are entitled to it, not for the wealthier people,” he made it clear.
Modi, he said, was correcting the “imbalance in the discourse” where rationalisation of subsidies is often construed as abolition of subsidy.
“He said, therefore, there are segments which are entitled to it. Therefore, there would be a target,” Jaitley said, adding people don’t use the same context while giving some kind of tax breaks to other sections of the economy.
India needs a small powerful corporate sector as well as strong powerful agriculture sector, he said. “I don’t think we can put these two sectors in conflict with each other. You need to make sure every sector of the economy grows,” the minister added. .
PTI