Jaitley Questions Nehruvian Model, Says It Led to No Development

Attacking PV Narasimha Rao, Jaitley said the former PM acted primarily out of compulsion.

In an address on Saturday, Finance Minister Arun Jaitley questioned the Nehruvian model. (Photo: Reuters)

In an arbitrary attack on the Congress, Finance Minister Arun Jaitley on Saturday said that the post-Independence Nehruvian model did not lead to any development in India.

That (Nehruvian) model of development was the reason India couldn’t get up to a growth rate of even 1 percent in those early decades. Other countries were developing, India wasn’t, that was the model of development we were following, and there are some people who actually praise that model.

Arun Jaitley

According to Times Now, he further said that former Prime Minister PV Narasimha Rao was a conservative — and acted primarily out of compulsion. In effect, the 1991 reforms, or economic liberalisation, was due to bankruptcy in India, he said.

‘Moderate Taxes, Evasions Cannot Coexist’

Amid intense speculation over the rate of Goods and Services Tax (GST), Jaitley said moderate taxes and high evasions cannot coexist.

If all taxpayers pay their taxes, it will help bring the tax rates further low. The more the evasions and exemptions, the higher will be the tax rate. So, moderate tax rates and evasions cannot co-exist.

Arun Jaitley said in a meeting of BJP workers.

The minister was replying to a demand made by Ashish Shelar, Mumbai BJP unit president, to bring the proposed GST rate at 17 percent. Explaining the rationale further, the minister said when more people evade taxes, it brings in an aberration in tax structures.

The proposed uniform taxation regime, GST, will integrate the country into one single market by ensuring a free flow of goods and services across the country, Jaitley said, adding that in order to enable this, we should have a uniform tax rate throughout the country.

The GST will ensure that taxation rates are moderate, which in turn will bring down the cost of doing business, thereby bringing down the cost for end-consumers.

You have to have one person being assessed once and not by different tax authorities in different states. This makes doing business easier.

Earlier this month, Parliament passed the much-delayed GST Bill. The peak GST rate will be finalised by the proposed GST council comprising the Union Finance Minister and his state counterparts, even as the chief economic advisor has suggested an 18 per cent peak rate.

(With PTI and Times Now inputs.)