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Finance Minister Arun Jaitley allays fears on fiscal deficit front
Feb 05, 2018
Says structural reforms would make economic management much easier in next fiscal
NEW DELHI, 5 February 2018: Finance Minister Mr. Arun Jaitley today sought to allay apprehensions regarding the higher fiscal deficit target in Budget 2018-19 pointing out that due to the tax correction measures there was buoyancy in direct tax collections, rationalisation of GST tariffs had increased corporate incomes and with anti-evasion measures in place, GST collections were slated to improve.
Addressing the Post-Budget FICCI's National Executive Committee Meeting here today, Mr. Jaitley said that the expectation is that next year�s growth would be higher as once the structural reforms play out, management of the economy would be much easier and the 0.3% slippage in the fiscal deficit target would appear to be merely "statistical" in character.
The Finance Minister said that Budget 2018-19 has been prepared in an environment characterised by years of slow global and domestic growth. Now, the global economy was looking up, the domestic economy was improving, exports were on the uptick and most quick economic indicators were showing a positive trend. He said that the country had now entered a phase when these benefits had to be consolidated.
He said that the budget makers had to bear in mind the performance of the conventional sectors, both high performing ones such as the services sector and the laggards which are now back on track. For instance, the government has hastened the pace of infrastructure development, provided support to the agrarian economy by way of creating infrastructure and increasing farm incomes and launched the ambitious national health insurance scheme.
In his remarks, Mr. Rashesh Shah, President, FICCI, complimented the Finance Minister for presenting an "outstanding and balanced" budget, referring particularly to the emphasis on the rural economy, infrastructure, financial sector reforms, expansion of the tax base, MSMEs and provision of investment and employment-based incentives.
However, Mr. Shah said that the government's promise of lowering the rate of corporate tax to 25% remained "partially unfulfilled" . He called for aggressive tapping of the non-tax revenues, hoped for reduction in litigation on the tax front and more communication on the part of the government on its tax raising efforts, particularly in bond markets.
Earlier, the Finance Minister released a monograph on �India Public Sector Enterprises' authored by Dr. Ajay Chhibber, Chief Economic Advisor, FICCI in collaboration with National Institute of Public Finance and Policy. The paper recommends that India needs to prepare a ten-year plan to privatize and improve the performance of its PSEs.
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