'For this government, there is no finish line'

Arun Jaitley speaks to Senior Editor Shweta Punj about the after-effects of demonetisation, finance bill amendments and Modi government's key achievements in an exclusive interview.

Q. On growth and key achievements

A. In India, we had a leaky legacy problem. During the boom period, the banks lent indiscriminately and now they don't have money left to support growth because of the NPAs. I think judged in this background there are 4-5 important things that the government has done. The pace of structural reforms has been the fastest ever in recent history. The present government has shown that there is no finish line. There were those who predicted that with demonetisation growth will fall over 2 per cent, but nothing of that sort happened. So every critique has been proved wrong. We have restored the place for honesty and integrity in India. The middlemen are on the run. The government has eliminated discretion, things move on their own. Delhi is not in 2017 what it used to be pre-2014. Revenue collections have had a big jump despite a global slowdown, revenues have grown 17-18 per cent a year for the past two years. This gives us flexibility on spending. Infrastructure revival is taking place, roads and highways are growing; airports are an even bigger success story. Port activity has moved on, on power we are surplus, so much so now the problem is how to manage the surplus when the demand is less.

On giving RBI the mandate to tackle NPAs

In the last few years, not a single major account has been sorted. The problem is not widespread-it relates to 40-50 accounts and therefore you have all the RBI circulars in place, you have the Joint Lenders Forum mechanism in place. All these will jointly lead to some resolutions. And why RBI? I think North Block intervention in the banking sector has brought a bad name, even though done informally in the past. We must maintain arm's length.

On fledgling private investment

Private investment is directly linked to the banking issue. They expanded indiscriminately during the boom period, creating a situation where they can't repay the banks. So the banks now don't have money to support private investment. NPAs go to the root of the issue.

On Demonetisation

I see three very positive outcomes. One, a message has sunk in that it is no longer safe to deal in cash, whether it is property or anything else. There is a greater movement towards digitisation and our tax collections, particularly at the level of income tax, have gone up. You have almost a 30 per cent increase in the number of assessees in the personal income tax category and this doesn't take into account the evaders. Some 1.8 million people still face a notice.

On finance bill amendments giving unprecedented powers to the tax department

This was just fake propaganda from the start. Tax evasion was sought to be defended as a rights issue-this was the tenor of the section 132 (a) debate! Since the IT Act in 1961, whenever the tax department receives information of evasion, it records reasons-name of the source, information given and the revenue intelligence as to why this person has to be raided. But this satisfaction note is never given to the assessee. A court observation made this position ambiguous-that you may have to give it. Hence the clarification is that this information may be shown to the court-if the court asks for it. But it can't be given to the assessee. This is the impact. It is an anti-evasion step. Where in the world are informant details, intelligence on tax violators given? This is like giving an IB report to a terrorist.