Finance Minister Arun Jaitley on Saturday attended the economic affairs review meeting chaired by Prime Minister Narendra Modi in New Delhi. Prime Minister will also be brain storming over economic issues and "state of the economy" with economists and senior government officials on Saturday.
Asked if fuel prices and duty cuts were discussed, he said the meeting today was internal review meeting. "Government is confident of meeting the 3.3% fiscal deficit target".
Claiming that Inflation is under control, the Finance Minister further said,"The govt is confident that we will have a growth rate higher than what he had projected earlier this year in the budget". He said that government is confident to achieve the fiscal deficit target for the current fiscal year.
Several issues were discussed during the meeting and a call will be taken on them in coming days, the minister further added.
Jaitley expressed confidence of meeting both direct tax, indirect tax and non-tax revenue targets for 2018-19. Though it is less than 92.4 per cent of the last fiscal, but problem is that revenue from Goods and Services Tax (GST) is below expectations and being the election year, expectation that there will be more expenditure.
"There is a phenomenal increase in the quantum of advance tax which has been paid". On August 31, the Controller General of Accounts (CGA) said the fiscal deficit for April-July was Rs 5.40 lakh crore.
"The worsening of the CAD has been evident for several months; yet the government did nothing". The tax cuts were effective from 27 July.
The government had projected a GDP growth rate of 7.2-7.5% in the Budget 2018-19. And even though we had a stiff target for direct tax collection, we can now see the impact of all the anti-black money measures which we had taken, like demonetisation and the GST.
The government will, however, find it an uphill task to meet the disinvestment target after cancelling immediate plans of selling national carrier Air India, although Jaitley said the government will meet the Rs 80,000 crore target for stake sale in state-owned enterprises.
The government has made a decision to withdraw withholding tax on Masala bonds, allow some breathing space to foreign portfolio investments, and check non-essential imports and promote exports in order to arrest the decline in rupee and check the widening current account deficit. It was chose to permit manufacturing sector entities, avail external commercial borrowing upto $ 50 million with minimum maturity of one year, against the earlier norm of three years. Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting.