Low oil, com­mod­ity prices helped spur In­dia’s growth pace: FM

The Pak Banker - - MARKETS/SPORTS -

There is still po­ten­tial for In­dia to grow at a faster pace, says In­dian Fi­nance Min­is­ter Arun Jait­ley.Govern­ment is on track to meet fis­cal deficit tar­get of 3.9 per cent. Fi­nance Min­is­ter Arun Jait­ley said In­dia re­mained one of the fastest-grow­ing economies in the world de­spite the global econ­omy re­main­ing un­cer­tain.

There was still po­ten­tial for In­dia to grow at a faster pace, he added. "All the ma­jor eco­nomic or­gan­i­sa­tions, in­clud­ing IMF, have pre­dicted low growth for the world econ­omy in the com­ing year," Mr. Jait­ley said on Fri­day. "Th­ese de­vel­op­ments have im­pli­ca­tions on In­dia's econ­omy as our ex­ports are also af­fected. How­ever, the sil­ver lin­ing is low in­ter­na­tional com­mod­ity and oil prices which, in turn, have helped in a bet­ter macroe­co­nomic sit­u­a­tion in the coun­try," he said while mak­ing the open­ing re­marks at the first meet­ing of the con­sul­ta­tive com­mit­tee of the Fi­nance Min­istry.

Re­gard­ing the fis­cal deficit, Mr. Jait­ley said that the govern­ment was on track to meet the 3.9 per cent of GDP tar­get set for the fi­nan­cial year. "This was the first time that the real ex­pen­di­ture amount was higher than the bud­get pro­posal. This year we have spent more but still we will very well man­age our deficit tar­gets," he said. Mr. Jait­ley said that dur­ing 2016-17, the govern­ment had to make pro­vi­sion for around Rs. 1.10 lakh crore to meet the li­a­bil­i­ties on ac­count of im­ple­men­ta­tion of Sev­enth Pay Com­mis­sion rec­om­men­da­tions and One Rank One Pen­sion (OROP) Scheme.

One ma­jor sug­ges­tion by the Com­mit­tee re­gard­ing tax­a­tion was to raise the tax ex­emp­tion limit for middle and salaried class from Rs.2.5 lakh to Rs. 4 lakh. In ad­di­tion, greater em­pha­sis is to be laid on widen­ing the tax base and pun- ish­ing tax evaders.

The Com­mit­tee also sug­gested that the thresh­old limit for manda­tory PAN card re­quire­ment for trans­ac­tion be raised to Rs.5 lakh and above from the cur­rent limit of Rs.2 lakh and above. Fur­ther, it was sug­gested that the ser­vice tax ex­emp­tion limit be raised from Rs.10 lakh to Rs.25 lakh. Other im­por­tant sug­ges­tions made by the Com­mit­tee in­cluded more al­lo­ca­tions for agri­cul­ture sec­tor and the set­ting-up of an In­dian Coun­cil for Ve­teri­nary Re­search (ICVR) to boost to milk pro­duc­tion.

An­other sug­ges­tion was to bring in more clar­ity to and aware­ness about the govern­ment's new crop in­sur­ance schemes. Re­gard­ing the en­vi­ron­ment, the Com­mit­tee sug­gested that the forth­com­ing bud­get give re­lief to in­dus­tries to set-up sewage and ef­flu­ent treat­ment plants. Other sug­ges­tions in­cluded more al­lo­ca­tions for drip ir­ri­ga­tion sys­tems to save wa­ter.

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