Govt sticks to deficit tar­get

The Asian Age - - Na­tion -

◗ Mr Jait­ley ex­uded con­fi­dence of sur­pass­ing the 7- 7.5 per cent GDP growth tar­get pro­jected in this year’s Union Bud­get

sat­is­fac­tion with re­gard to broad pa­ram­e­ters in re­la­tion to econ­omy and macro- eco­nomic data which is so far emerg­ing for this year,” said the fi­nance min­is­ter.

Mr Jait­ley ex­uded con­fi­dence of sur­pass­ing the 77.5 per cent GDP growth tar­get pro­jected in the Bud­get pre­sented on Fe­bru­ary 1, meet­ing cap­i­tal ex­pen­di­ture tar­gets, sur­pass­ing tax col­lec­tions pro­jec­tions and ex­ceed­ing the record ` 1 lakh crore tar­get of rev­enue mo­bil­i­sa­tion from govern­ment stake sale in PSUs.

“The govern­ment is con­fi­dent that we will have a growth rate higher than what we had pro­jected ear­lier this year in the Bud­get,” he said, adding “in­fla­tion is broadly un­der con­trol”.

He, how­ever, did not say if the meet­ing dis­cussed the re­cent spike in fuel prices that has led petrol touch­ing a record high of ` 81.63 per litre and diesel to ` 73.54 a litre.

Al­most half of the re­tail sale price of petrol and diesel is made up of cen­tral and state taxes. The Cen­tre cur­rently levies a to­tal of ` 19.48 per litre of ex­cise duty on petrol and ` 15.33 per litre on diesel. On top of this, states levy Value Added Tax ( VAT).

There were ex­pec­ta­tions that the govern­ment may cut ex­cise duty on the two fu­els to ease bur­den on the con­sumers but it seems it didn’t want to take chance as it stands to lose ` 14,000 crore in rev­enue from a ` 1 per litre cut in ex­cise.

The govern­ment feels that the coun­try can­not af­ford to have a twin deficit prob­lem — a de­pre­ci­at­ing ru­pee and high crude im­port bill putting pres­sure on the coun­try’s cur­rent ac­count deficit ( CAD), and a fis­cal slip­page. “The pri­mary fo­cus of yes­ter­day’s dis­cus­sions was with re­gard to cur­rent ac­count deficit and how to nar­row it down and pos­si­ble steps with that re­gard. To­day, of course, was an in­ter­nal meet­ing in which the Prime Min­is­ter took the re­view of var­i­ous de­part­ments of fi­nance,” Mr Jait­ley said. De­part­ments of eco­nomic af­fairs, rev­enue, ex­pen­di­ture and dis­in­vest­ment made de­tailed pre­sen­ta­tion to the Prime min­is­ter, he said. There had been con­cerns that the govern­ment may be forced to cut cap­i­tal ex­pen­di­ture due to volatil­ity in GST rev­enue col­lec­tions that can have neg­a­tive im­pact on growth as pri­vate in­vest­ment has still not picked up. Some rat­ing agen­cies had also ex­pressed fear that In­dia may not be able to meet the fis­cal deficit tar­get due to high oil prices.

Mr Jait­ley said that rev­enue de­part­ment told the Prime Min­is­ter that di­rect tax col­lec­tions are mov­ing ahead of sched­ule and gains from anti- black money mea­sures like de­mon­eti­sa­tion and GST have started show­ing with in­crease in tax base and in quan­tum of ad­vance tax which is be­ing made.

The fi­nance min­is­ter said that as far as GST is con­cerned it has started set­tling down and pick up in con­sump­tion will start show­ing its im­pact on GST col­lec­tions in com­ing months. The govern­ment on Fri­day had an­nounced a se­ries of mea­sure to strengthen the Ru­pee in­clud­ing re­moval of re­stric­tions on ex­ter­nal com­mer­cial bor­row­ings and masala bonds to con­trol the cur­rent ac­count deficit.

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