Jaitley Defends FDI in Insurance, Defence

The Finance Minister says the country needs investment from outside to bounce back to 8 per cent growth rate from the present 5 per cent .

Published: 25th July 2014 08:54 AM  |   Last Updated: 25th July 2014 08:57 AM   |  A+A-


NEW DELHI: Finance Minister Arun Jaitley on Thursday strongly defended FDI in Insurance and Defence sectors. Replying to debate on general budget in the Rajya Sabha, Jaitley said that 56 members spoke on the budget for the last two days. “Some members said that budget has several idea of earlier government. Having copy right of these ideas, the Congress members are grudging something. Earlier government could have been decisive,” Jaitley said.

“Last two financial years, growth rate is around 5 per cent. How does India Bounce back to 8 per cent growth rate? We need investment from outside. FDI is source. Investment leads to economic activity,” the FM said.

He said that incentives were given to manufacturing sectors, and clusters will create jobs. “We had gone back to original idea of 49 per cent FDI in insurance sector. We need to expand insurance sector.”  He also defended FDI in the Defence sector.

The FM clarified that there was no reduction in the allocations to any sector,  including the social sector.

Referring to AIIMS, Jaitley said `100 crore would be insufficient. But this is only start up of a scheme with token allocation. He assured that all the higher educational institutes and AIIMS-like institutions would be funded. He said new states Andhra Pradesh and Telangana would be supported fully. Whatever revenue deficit, it will be taken care of, he added.

Minister of State for Finance Nirmala Sitaraman said that pre-budget consultations were held with representatives of States.

She said that it was not correct to say that Chief Ministers were not consulted before preparing the budget. “Finance Minister sat with Ministers of Finance Ministers of States twice and had elaborate discussions with them.”

Earlier, participating in the debate on general budget in the Rajya Sabha, Congress member Jairam Ramesh raised the issue of confusion about Aadhar card and wanted a clear statement from Jaitley.

R R Lakshmanan (AIADMK) pointed out the urgency for initiatives to inter-link rivers. Maintaining that Tamil Nadu is highly dependent on water from the Cauvery River for irrigation and drinking purposes, he wanted the government to allocate certain portion of funds to strengthen the banks of the Cauvery.

Jharna Das Baidya (CPM) said that the Budget, essentially failed to chart a trajectory to increase growth and investment, create employment and check inflation that are needed in the current scenario.

Rajeev Chandrasekhar (Independent) said that the Budget is a first step in a difficult process of rebuilding the economy.

Meanwhile, in the Lok Sabha, the Opposition attacked the government over rising inflation during discussion on the finance Bill.

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