Farmers will benefit from the decision to allow 100% foreign direct investment in the marketing of food products manufactured locally, says finance minister Arun Jaitley. Edited excerpts from an interaction on the Lok Sabha TV, where ET’s Deepshikha Sikarwar was one of the panellists. There was a huge debate in the country regarding relaxing the fiscal deficit targets. But you decided to stay with the target? Why is it so? I consulted a huge cross-section of opinion. Industry by and large was in favour (that) you spend more. Most politicians were not concerned whether it is 3.5% or 3.7%. Economists were a divided house but the predominant opinion among the economists was that you gave a pause last year. You can’t be the fastest growing economy in the world and oil prices in their 30s (dollars to a barrel) and still say you can’t meet fiscal discipline and you can’t do it two years in a row. I think two things are extremely important. First is, not that you maintain your fiscal deficit but you maintain the quality of fiscal deficit. The UPA also maintained the fiscal deficit figure for several years. But they did that with huge (spending) cuts. There are only two ways you can maintain fiscal deficit: either you earn more or spend less. They maintained it by spending less. When you spend less, you compromise on growth. Year 2015-16 has helped me to establish credibility of this government that, after ages, revised estimates are higher than budget estimates. We have spent more, we have earned more and we have maintained the fiscal deficit target of 3.9% of GDP and, therefore, we have maintained the quality of fiscal deficit. This year, the pendulum swung in the way of credibility. And, having got the benefit of low oil prices and various factors, when we totalled up, with some difficulty we realized we could make it. And, we haven’t compromised on expenditure. I keep my fingers crossed that by the end of next year we are able to reach that. While I was having discussions with some eminent people, they came out with a suggestion that does India need a single-point fiscal deficit target or could it be a range. Could we have said it’s between 3.4% and 3.6%? So, you have some flexibility and you don’t cut down on pro-poor schemes. I thought it was a point worth consideration. Whereas for this year (2016-17), I have kept it at 3.5%. For future, we shall have the wisdom of expert opinion that could it be a narrow range. You have projected nominal GDP growth for 2016-17 at 11% as against 8.6% this year. Your revenue growth this year is 17% whereas you have projected growth of 11%. Have you been conservative? I’d rather be conservative and improve. I may end the current year with higher revenues despite stressed private sector balance sheet. But current year is an exception, I am conscious of that. If growth this year is 13-14%, rest came from additional revenue measures. May be that luxury is not available next year. One of the central themes seemingly from outside is it’s a budget for Bharat, if one looks at expenditure provisions or look at taxes where you have leaned on the rich. Is it a right surmise to make? Collecting an additional Rs 19,000-20,000 crore in taxes on a budget of Rs 20 lakh crore is 1%. What are the items and who are the people we are taxing. You are taxing products that are environmentally harmful, largest contribution comes from coal. Secondly, you are taxing products that impact health and, thirdly, you are taxing essentially the rich. In fact, to weaker sections and the middle class, in many aspects this budget gives huge relief. Whether do you spend this money? Our services are doing reasonably well. Stress is really agrarian. Much of these schemes converge into real expenditure in rural areas. That’s where you need money, that’s where you need expenditure, improve rural incomes. Whether it’s political considerations or economic, both converge in that direction. You have announced an amnesty scheme. Are you creating a moral hazard for tax policymakers? I have carried out some monumental changes in taxation. It’s not a VDIS (voluntary disclosure of income scheme) and it is not an amnesty. Inequality arises in amnesty, that on a certain income you as an honest tax payer have paid 30% and I come after 20 years and say that I would also pay 30%. This is not structured that way. You pay 30% tax and 7.5% and another 7.5%, which is 45%, ending up paying one-and-a-half times more. So, you are paying penalties for not paying tax in time. This is intended to bring some money from outside the system to the system. There is a second scheme where in direct taxes if an appeal is pending, pay up to a certain point principal tax plus interest till the date of assessment. A similar scheme for excise and service tax. There is a scheme for retro tax as well, where you pay principal liability, but no interest or penalty. I have tried to clean up the book. How will the FDI in food work? Will companies such as IKEA or Wal-Mart be able to invest in the sector if they buy grown or made-in-India goods? have allowed 100% FDI in food grown and manufactured in India. Investment can come in from anywhere, ultimately it’s my farmer who will benefit. My party had lot of reservations about multi-brand retail. If products come from outside the country, this would not apply. Any company buys from Indian farmer and processes it here and sells it here or outside the country, I have no objection to that. Our farmer would be benefitting from it.