Will meet all...
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.