Will meet all...

Hindustan Times ST (Mumbai) - - HTNATION -

Ris­ing oil prices and higher in­ter­est rates may mean that the fis­cal deficit tar­get will be missed, rat­ing com­pany Moody’s In­vestors Ser­vice said this month.

“Gov­ern­ment is con­fi­dent of meet­ing the 3.3% fis­cal deficit tar­get,” Jait­ley said af­ter the re­view meet­ing. “The gov­ern­ment had spent 44% of the bud­geted cap­i­tal ex­pen­di­ture till 31 Au­gust and there will be no cuts in capex by the end of this year.”

Brief­ing re­porters af­ter the re­view meet­ing Jait­ley said that af­ter the pre­sen­ta­tions made by sec­re­taries of the de­part­ments of eco­nomic af­fairs, rev­enue, ex­pen­di­ture and dis­in­vest­ment, Prime Min­is­ter Modi ex­pressed sat­is­fac­tion on var­i­ous as­pects of the econ­omy.

On Fri­day, Jait­ley an­nounced five mea­sures aimed at in­creas­ing the in­flow and stem­ming the out­flow of dol­lars, in­clud­ing two that per­tain to ex­ter­nal cur­rency bor­row­ings: a re­view of the manda­tory hedg­ing con­di­tions for ex­ter­nal in­fra­struc­ture loans and the per­mis­sion for man­u­fac­tur­ers to raise up to $50 mil­lion through such loans for a min­i­mum pe­riod of a year (down from three pre­vi­ously).

They also in­clude mea­sures re­lated to masala bonds, which are bonds sold over­sea and de­nom­i­nated in ru­pees: an ex­emp­tion for masala bonds is­sued in 2018-19 from the with­hold­ing tax (which will en­cour­age more buy­ers to pur­chase them) and re­moval of the re­stric­tion on Indian banks on mar­ket mak­ing for such bonds in­clud­ing un­der­writ­ing them. Eco­nomic af­fairs sec­re­tary Sub­hash Chan­dra Garg told CNBC-TV18 on Fri­day that the five mea­sures will have an im­pact of around $8-10 bil­lion.

The com­mit­ment to main­tain­ing the bud­get tar­gets in a year when state as­sem­bly polls are due in five states, lead­ing up to next year’s gen­eral elec­tion, also in a way rules out any cut in ex­cise duty on petroleum prod­ucts, which have be­come more ex­pen­sive in step with in­ter­na­tional crude oil prices. In a Face­book post in June, Jait­ley said de­mands for huge cuts in fuel prices by op­po­si­tion par­ties could lead In­dia into a debt trap.

The gov­ern­ment can ill-af­ford to lower the guard against fis­cal deficit as a twin deficit prob­lem in­clud­ing al­ready high cur­rent ac­count deficit could fur­ther dampen mar­ket con­fi­dence in the Indian econ­omy.

Jait­ley ex­pressed con­fi­dence of the gov­ern­ment meet­ing both di­rect tax, in­di­rect tax and non­tax rev­enue tar­gets for 2018-19.

“On di­rect tax col­lec­tions are con­cerned, we can now see the im­pact of all the anti-black money mea­sures we have taken, of de­mon­eti­sa­tion and the goods and ser­vices tax (GST). There is a phe­nom­e­nal in­crease in the num­ber of peo­ple fil­ing tax re­turns and the quan­tum of ad­vance tax be­ing paid. The Cen­tral Board of Di­rect Taxes (CBDT) is very clear that this year we will be able to col­lect in ex­cess of the bud­geted tar­get,” said Jait­ley.

Jait­ley’s con­fi­dence of meet­ing gross tax rev­enue tar­get of ₹22.7 tril­lion this fis­cal, a 17% jump from what was col­lected in FY18, stems from strong growth in in­come tax re­ceipts, the antieva­sion mea­sures taken in the GST regime and ex­pec­ta­tions of higher con­sump­tion of con­sumer goods driven by GST rate cuts that came into force to­wards the end of July.

A 71% in­crease in in­come tax re­turn fil­ers be­fore the 31 Au­gust dead­line this year from a year ago hints at im­proved di­rect tax com­pli­ance. The GST cuts on items like air con­di­tion­ers, small tele­vi­sions and wash­ing ma­chines an­nounced in July has marginally de­pressed the com­bined GST re­ceipts of union and state gov­ern­ments in Au­gust to ₹93,960 crore com­pared to re­ceipts in the pre­vi­ous month. The tax cuts were ef­fec­tive from 27 July.

Ex­perts said that the op­ti­mism on meet­ing tax tar­get was well-placed. “I am rea­son­ably con­fi­dent of the gov­ern­ment meet­ing the to­tal tax re­ceipts tar­get, com­bin­ing di­rect and in­di­rect taxes, as any slip­page on in­di­rect tax col­lec­tion may be com­pen­sated by growth in di­rect taxes. We are now see­ing the im­pact of de­mon­eti­sa­tion on di­rect taxes,” said M S Mani, part­ner, Deloitte In­dia.

The gov­ern­ment will, how­ever, find it an up­hill task to meet the dis­in­vest­ment tar­get af­ter can­celling plans to sell na­tional car­rier Air In­dia although Jait­ley said the gov­ern­ment will meet the ₹80,000 crore tar­get for stake sales in state-owned en­ter­prises. and watch,” Lobo said.

On Fri­day evening, Parrikar vis­ited his an­ces­tral home for Ganesh Chaturthi cel­e­bra­tions for about 25 min­utes. He is not known to miss the an­nual fes­ti­val and this year only made it on the sec­ond day. A host of rul­ing party mem­bers, min­is­ter and law­mak­ers called on the chief min­is­ter on Fri­day.

Lobo, who called on Parrikar at a pri­vate hos­pi­tal in Can­dolim be­fore his de­par­ture for New Delhi, de­scribed his con­di­tion as “not good.” Re­ports in­di­cate that Parrikar is not re­spond­ing to med­i­ca­tion and is pro­gres­sively be­com­ing weaker, which led to his be­ing shifted to AIIMS.

As it faces pres­sure from al­liance part­ners to put an al­ter­na­tive in place in the absence of Parrikar, who has held the coali­tion to­gether since it was formed af­ter the Fe­bru­ary 2017 state elec­tions, the BJP has lim­ited op­tions be­fore it: dis­so­lu­tion of the house to make way for early elec­tions, ap­point­ing Union min­is­ter of state for AYUSH Shri­pad Naik as in­terim CM or hand­ing charge to some­one else in the cab­i­net.

Pres­i­dent of the Ma­ha­rash­trawadi Go­man­tak Party (MGP) Deepak Dhava­likar de­manded that charge of the state be en­trusted to “some­body se­nior” for the sake of Goa. MGP min­is­ter Sudin Dhava­likar is the se­nior­most leader in the state as­sem­bly.

“What I have said is in the in­ter­est of Goa. The charge needs to be given to some­body se­nior. For the last eight months Goans are suf­fer­ing. Some­body needs to be in charge in Goa. Let it be given to some­body se­nior. Let them (BJP) de­cide who it needs to be given to,” Deepak Dhava­likar told Hin­dus­tan Times. Sudin Dhava­likar was ap­pointed the leader of the rul­ing benches dur­ing an ear­lier hos­pi­tal­i­sa­tion of Parrikar.

Goa For­ward Party, an­other al­liance part­ner, and in­de­pen­dent Govind Gaude, who is also a min­is­ter, don’t favour the idea. Gaude de­feated Deepak Dhava­likar in the elec­tions last year.

Goa For­ward’s supremo Vijai Sarde­sai said the MGP’S opin­ion alone didn’t mat­ter; what mat­tered is a con­sen­sus. Its stance could throw the al­liance into jeop­ardy.

The BJP’S sit­u­a­tion is com­pli­cated by the fact that the se­nior­most BJP leader and for­mer deputy chief min­is­ter un­der Parrikar,d’souza, is also ail­ing and hos­pi­talised at the Me­mo­rial Sloan Ket­ter­ing Can­cer Cen­tre in New York, the same fa­cil­ity where Parrikar was admit­ted ear­lier this year.

The chief min­is­ter, as has been his style of func­tion­ing. keeps most of the port­fo­lios with him­self; he cur­rently holds 52 port­fo­lios. Be­sides the main port­fo­lios of home and fi­nance, Parrikar also looks af­ter min­ing, en­vi­ron­ment and forests. In ad­di­tion, he has been look­ing af­ter the port­fo­lios of his two ail­ing col­leagues D’souza (ur­ban de­vel­op­ment and law) and Pan­durang Mad­kaikar (elec­tric­ity).

Parrikar was in­stru­men­tal in stitch­ing to­gether the rul­ing al­liance in Goa. Two of the BJP’S al­lies, in­clud­ing Dhava­likar’s MGP, had made their join­ing the al­liance in 2017 con­di­tional on Parrikar lead­ing the gov­ern­ment. The BJP has 14 MLAS and the two ma­jor al­liance part­ners have three MLAS each in the 40-mem­ber house.

The op­po­si­tion Congress, which re­mains the sin­gle largest party with 16 MLAS, said it would wait and watch as the sit­u­a­tion de­vel­ops but did not lose the op­por­tu­nity to hit out at the rul­ing al­liance.

“The rul­ing po­lit­i­cal par­ties are un­leash­ing the ugly game of power and clam­our­ing for their ben­e­fit. They can’t even give charge to a trusted lieu­tenant in the absence of CM. While we sym­pa­thise with the chief min­is­ter as far as his health is con­cerned, his act of snatch­ing away the man­date given to the Congress in the 2017 as­sem­bly elec­tions and his to­tal mis­man­age­ment of all ma­jor is­sues in Goa has al­ready driven Goa to the edge,” state Congress pres­i­dent Girish Cho­dankar said.

“No one in Goa is Happy, the BJP is not happy, al­lies are not happy, the peo­ple of Goa are un­happy, bu­reau­crats and gov­ern­ment of­fi­cers are un­happy, even the CM and min­is­ters are un­happy. This hap­pens when you don’t re­spect peo­ple’s man­date,” Cho­dankar said.

The chief min­is­ter was first hos­pi­talised on Fe­bru­ary 14 for what was re­ported to be a case of food poi­son­ing. The state ad­min­is­tra­tion said then that the chief min­is­ter would be “un­avail­able for next two days as he has to un­dergo a rou­tine health check-up in Mum­bai.”

On Fe­bru­ary 16, the state ad­min­is­tra­tion said the chief min­is­ter “is well and un­der ob­ser­va­tion. He is likely to be dis­charged in a day or two. It is a case of mild pan­cre­ati­tis.”

The next day, how­ever, it was re­ported that Parrikar was un­der mon­i­tor­ing for “in­flamed pan­creas” with the as­sump­tion that his treat­ment would take longer than ini­tially an­tic­i­pated and the Goa Leg­isla­tive As­sem­bly’s bud­get ses­sion, ini­tially planned for three weeks, was cur­tailed to only four days.

On Fe­bru­ary 23, he de­fied the odds and pre­sented the state’s fi­nan­cial state­ment in the As­sem­bly the same day he was dis­charged from Mum­bai’s Lilavati Hos­pi­tal.two days later he had to be read­mit­ted to hos­pi­tal with dehydration.

He trav­elled to the US for treat­ment at the Me­mo­rial Sloan Ket­ter­ing Can­cer Cen­tre in New York on March 5 and re­mained there for a pe­riod of three months, re­turn­ing on June 14 in time for the mon­soon ses­sion of the Goa as­sem­bly.

He flew to the US on Au­gust 10 for fol­low-up treat­ment,re­turned on Au­gust 20 and was admit­ted in Mum­bai’s Lilavati Hos­pi­tal the next day. While he was ini­tially ex­pected to come back on Au­gust 25, his re­turn was de­layed and then he left again for the US on Au­gust 30 for a fi­nal time, re­turn­ing on Septem­ber 6 only to be admit­ted in a pri­vate hos­pi­tal in Goa ear­lier this week.

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