Striking an optimistic note over the transformative ideas sweeping the country, Finance Minister Arun Jaitley on Friday said that India is undergoing a change for the better. But the effect of these changes is uneven and not seen across the country.
“Change is happening in India. But the trouble is that it is a little lop-sided and happening only in parts of the country,” he said at the first ever BusinessLine Change Makers Awards event, marking the 25th year of the business newspaper.
In a conversation with BusinessLine's Editor, Raghavan Srinivasan, the Finance Minister said that change is yet to happen in rural India while tribal India has been largely left any positive change.
“Change in the North, West and South of India is faster than in the East,” he further added.
Attitude shift needed
The Minister noted that while in social campaigns such as 'Beti Bachao, Beti Padhao', Swachh Bharat and sanitation, a lot of strides have been made, in other areas, such as paying taxes, “the whole attitude needs to change”.
Noting that it is a global norm for people to pay their taxes honestly, Jaitley rued that “in India, it is not accepted as a social or personal philosophy”.
In India, he said, it is not considered unethical to bypass paying taxes to the State. “One may be deeply religious and philosophical and doing a lot of philanthropy. But it is no part of their duty to pay every rupee of public finance that they are supposed to pay,” he said, adding that this must change and, in some cases, there has to be an element of compulsion along with campaigns.
The Finance Minister also noted that there is a lot more fiscal discipline at the Centre. But with the 14th Finance Commission, there are larger resources flowing to the States and this has prompted some of them to give handouts as it is considered “easy politics” and seen as a vote-earning mechanism.
“I don’t think this is the case”, he said, adding that States that gave cheaper power and almost ran their Electricity Boards to the ground, did not eventually win elections.
Negative effect of handouts
He stressed that States can and must subsidise the poor and the deserving in certain sectors such as education, food and health. But if they go beyond these areas, they end up ruining their economies, he warned.
“Even States that were traditionally affluent have now become fragile,” he said, pointing to Punjab as an example.
Jaitley also highlighted that in recent years India has seen transformative changes in sectors such as highways and telecommunications, where users are willing to pay for world-quality services.
“As long as users continue to pay for such services, the quality of services will continue to be good,” he said.
The Finance Minister maintained that big ideas are shaping up and mega projects such as ports, industrial corridors and new townships are coming up.
“At a certain level in the country, a lot of these activities are taking place,” he said. In fact, there are now 17-20 cities in the country whose living standards match the levels of Delhi and Mumbai, he added.