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Note ban, GST to widen tax base; focus on clean political funding: Jaitley

At Delhi Economic Conclave, Singapore deputy PM says little late for India in terms of job creation

Arup Roychoudhury  |  New Delhi 

Arun jaitley, Tharman Shanmugaratnam
Arun Jaitley shares a light moment with Tharman Shanmugaratnam (L), Deputy Prime Minister of Singapore, at the Delhi Economics Conclave-2017

Finance Minister (pictured) on Saturday said the Centre was trying to clean up political funding, considered one of the major repositories of unaccounted wealth. He said and the goods and services (GST) would lead to greater compliance and digitisation. 

“For the past 70 years, India’s economy has been funded by invisible money. Elected representatives, governments, political parties, and the completely failed in checking it,” Jaitley said at the Delhi Economics Conclave.

“This is why in the last Budget I suggested a solution; we are actively working on it.” 

In his 2017-18 Budget speech, the FM had announced a number of proposals to clean up political funding, including issuing electoral bonds and the amendments required in the Income-Act and the RBI (Reserve Bank of India) Act to enable that, encouraging donation through traceable digital transactions, and the reduction of individual donations from Rs 20,000 to Rs 2,000. 

The finance ministry is reported to have finalised the draft norms for electoral bonds, and the guidelines are expected to be sent to the RBI, the election commission, political parties, and other government departments.

Jaitley also reiterated the Centre’s stance that the of high-value currency worth Rs 15.44-lakh crore in November last year, along with rolled out at the beginning of this month, had dealt a crippling blow to the black economy.

“The net impact of the exercise coupled with the is going to make generation of cash a lot more difficult. It will certainly lead to greater compliance and digitisation,” he said.

“Already the first signs of more digitisation, and the expansion of the base of direct and indirect taxes is visible,” the minister added.

Also speaking at the inaugural session of the conclave was Deputy Prime Minister who said that India should take steps to ensure that its demographic dividend does not turn into ‘demographic deficit’.

Shanmugaratnam said that it was already a little late for India in terms of job creation, and added that while great strides had been made in skilling initiatives, the training imparted and the education given to India’s youth were still not effective enough to provide to the millions entering the workforce every year. He said that skill training had to be upgraded to ensure at a time of increased digitisation.

The deputy prime minister also said that while India has a robust system of competitive federalism among states trying to do better against each other in various parameters, a sense of competitive sub-federalism is also required, to enable cities in the country to compete with each other.