Extract of FM Speech in Lok Sabha During Budget Discussion on Friday 18.07.2014

A defining moment against us, both to the domestic investors and international investors, was the idea of a retrospective tax. Any economy, which can enact a retrospective tax and say this applies 40 years earlier, destabilises businesses, and, therefore, the world was not willing to accept it.

When you say that it is your Budget, the retrospective tax mess was created by you. We have tried to substantially resolve the problem. The whole regime of tax terrorism where civility had to be added to it, the problem was created by you. How can the two be similar? So, as far as taxation is concerned, we have said that there will be no retrospective tax as far as the future is concerned. We have given a cushion that we would not tax people retrospectively creating fresh liabilities. We are trying to create an environment where GST be enabled in this country. We have taken a radical step by saying that the facility of advance ruling will be available when Indians invest in business in India. The non-residents were entitled to it.

There are not many occasions where the limit has been raised by Rs.50,000 even. My friend Dr. Shashi Tharoor is not here. He asked: “Why should it not be Rs.5 lakh?” I wish, his Party had done even half of it. But then this is the beginning.

One of my only regrets is that we do not have enough money in our pocket to make it to that figure. But it is not this alone. When I said that savings have come down from 33 per cent to 30 per cent, the 80C exemption being raised from Rs.1,00,000 to Rs.1,50,000, it is to encourage small tax payers and all tax payers to save more. When they deposit it in their savings, that money goes in for national development and infrastructure building. It goes into banks; it goes into provident fund; and it goes into several other securities. There also I have raised it by Rs.50,000