NEW DELHI: Ahead of the budget, which is going to be a vote on account for the next fiscal,
finance
minister
Arun Jaitley supported lower tariff regime saying that higher the tariff, bigger the evasion across sectors.
Speaking at the 61
st Foundation Day celebration of the
Directorate of Revenue Intelligence
(DRI) here on Tuesday, the finance minister pointed out how agencies such as the DRI have detected huge evasion of Rs 4,000 crore in the form of trade-based
money laundering
. Challenges to the Indian economy remains, he said.
“For decades we were a regulated economy. We had very high tariffs. Higher the tariff, the level of evasion will be widespread across sectors and therefore you had widespread smuggling,” the finance minister said. The minister said that though, over the last quarter century, successive governments gradually rationalised the tariffs, but the challenges to the economy continue to exist.
While talking about lower tariff regime and increasing instances of trade based money laundering, the finance minister mentioned Indians attraction for gold and the widespread smuggling of the precious metal. The DRI had, in the last fiscal, seized gold valued at over Rs 970 crore.
This is the second time within a week the finance minister has spoken about dismantling trade barriers in terms of higher tariff. On Monday, he spoke about bringing down
trade barrier
as it had its own impact and ‘takes away competitiveness’ where ultimately it is the domestic economy that suffers. There may be a course correction in the government as in the last budget, it had proposed increased customs tariffs on lot of
consumer electronics
and other imports in line with its ‘make in India’ philosophy.
Jaitley had a word of advice for the investigative agencies: to remain fearless and free from collateral controversies, ensuring the cases taken up by them result in maximizing penalty and end in convictions.
"If I look at the cross section of various investigative agencies, including the police which is the basic investigative agency with largest network in the country, it goes to the credit of DRI that by and large it has remained free from any collateral controversies," he said.
Jaitley said investigative agencies should maintain utmost level of professionalism and be guided by one sole purpose, which is detection of crime. His comments are seen in the context of recent controversy within the CBI following which the government had divested its director and special director from their posts.