Union Finance Minister Yashwant Sinha has hinted at bringing down peak Customs duty to 20 per cent from the present 35 per cent in the Budget, besides a slew of measures to make Indian industry competitive, but was non-committal on lowering interest rates on contractual savings -- like Provident Fund. "Our stated objective is to reduce peak import duty to 20 per cent," Sinha said, adding it was time that tariff and non-tariff barriers were brought down.
Emphasising that 10 years were sufficient for India to become competitive, Sinha said at the India Today Conclave industry should become competitive to meet the challenges of globalisation by moving away from the era of protectionism.
The only mantra for industry was to be efficient, Sinha said, adding it should perform so that people got a "better deal" as in the rest of the world.
Later, Sinha told reporters that an expert committee in the labour ministry was going into the the issue of interest rate on contractual savings like Provident Fund, but "I have not received any recommendations yet".
There are reports that it could suggest lowering of interest rates from the present 9.5 per cent to 8.5 per cent in the face of lower inflation to help in moving towards a softer interest rate regime. On the need to increase defence allocation, Sinha said he would, ideally, prefer to spend more on development needs, but no country could afford to sacrifice national security.
"It is in the interest of all of us to avoid a war. But, if war is thrust upon us we would not shy away from it," Sinha said.
"Left to myself, I would like to spend on development needs. But till the regional and security situation improves, we will have to spend on defence," he said.
Stressing the need for evolving a consensus to shun populism, Sinha said it was time that political parties came together to take a united stand.
Gone are the days when elections were held once in five years, Sinha said, adding there were elections every six months and politicians both from ruling and opposition parties should join hands to say "thus far and no more". "Political populism is becoming unsustainable," he said, adding consensus should be evolved for better governance so that there could be efficient use of scarce resources.
On the need to cut subsidy, Sinha said the government was committed to do away with cross-subsidisation, but no timeframe had been fixed.
Sinha claimed macro-economic figures did not always reflect the situation on the ground, and said the tremendous and visible progress in the large and vibrant unorganised sector and rural areas are not reflected in the statistics.
"I don't see the kind of poverty and misery portrayed by some of us when I visit my constituency", which is in a backward area, Sinha said.
This is precisely the reason why the government constituted Rangarajan Committee to go into the issue of National Statistical Commission, Sinha said, adding the Committee had made its recommendations which were being "seriously" considered. Sinha said the most important challenge of development was to improve efficiency to enable optimum use of resources to move on to higher growth path.
"We must be able to use our resources efficiently particularly the financial sector and domestic industry," Sinha said, adding, "competitiveness leads to efficiency."
Sinha also said globalisation led to free flow of ideas which was crucial for development.
Touching upon the need to push reforms, the finance minister said it was time that liberalisation percolated to states and added there was need for states to improve the quality of governance. For this evolving a political consensus to stop populism was important. Bureau Report