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Gross tax revenues of the Government increase by 20.8 per cent



FM: Indian economy is on path of recovery despite uncertainty and volatility in global economic situation; Government continues to adhere to the path of fiscal consolidation;

Gross tax revenues of the Government increase by 20.8 per cent during April-November 2015-16 over the corresponding period in the previous year led by a buoyant growth in indirect taxes 

The Union Finance Minister Shri Arun Jaitley today said that Indian economy is on path of recovery despite uncertainty and volatility in global economic situation. He said that India recorded a higher growth of 7.3 per cent in 2014-15 as compared to 6.9 per cent growth achieved in 2013-14 and 5.1 per cent in 2012-13, despite the slowdown witnessed in the world economy, pointing toward resilience of the Indian economy. He said that the rate of growth of GDP in the first half of the current financial year 2016-17 is estimated to be 7.2 per cent. The Finance Minister was making the Opening Remarks during his pre-Budget consultation Meeting with the leading economists here today.

The Finance Minister Shri Jaitley further said that the Government continues to adhere to the path of fiscal consolidation. He said that the Budget 2015-16 targeted fiscal deficit of 3.9 per cent of GDP, as compared to 4.0 per cent in 2014-15 in spite of the pressing need for enhanced public investment to boost the economic growth. He said that this achievement is all the more significant as the Government fully implemented its tough commitments on account of requirements of federal structure i.e. greater tax devolution-from 32 per cent to 42 per cent of the divisible pool to States following the recommendations of the Fourteenth Finance Commission. He said that the fiscal deficit in April-November 2015-16 stood at 87 per cent of the Budget Estimates vis-à-vis 98.9 per cent in the corresponding period of the previous financial year. On the other hand, the Minister said that the Gross tax revenues of the Government increased by 20.8 per cent during April-November 2015-16 over the corresponding period in the previous year, which was mainly led by a buoyant growth in indirect taxes including excise, customs duty and service tax collections.

Various suggestions were made during the Finance Minister’s Meeting with the eminent Economists for consideration of the Finance Minister while formulating the budgetary proposals for the Union Budget 2016-17.

The major suggestions included in bringing changes in small savings rate which will in turn push the economy and to focus on increasing private and public investment. Some of the members suggested not to go for aggressive fiscal consolidation and continue on public spending while some of the members were of the view that higher growth can be achieved even by following the path of fiscal consolidation among others and the Government should not compromise in fiscal measures.

Other suggestions included focusing on measures on poverty reduction, increasing female labour participation in the growing economy and development measures for Tribal community. It was suggested that the Socio Economic Caste Census need to be used for identifying the right beneficiaries and thus bringing them to the forefront. It was suggested that the LPG subsidy is regressive and need to be done away with. It was further opined that the Fertilizer subsidy was not benefitting the farmers and it is time to relook into it. There was mixed opinion in terms on reduction of corporate tax as some found it be favoring the rich and others found it to be a great step towards increasing investment and thus boosting the economy. There was suggestion to relook into the Income Tax slabs to bring about parity within the different sections of population. At the same time, many congratulated the Government for the measures undertaken by it for swift online filing, processing of Income Tax returns, online issue of refunds within week in some cases, on line assessment, on line reply to queries etc and thus making the whole process transparent, efficient and citizens centric.

Other suggestions included setting-up of a Fiscal Council, maintaining medium term Fiscal targets, ensuring time bound investment under Corporate Social Responsibility(CSR), measures to address or incentivize the families affected by catastrophic diseases as this brings many families from APL to BPL. There were also suggestions to deal with NPAs, as declaration of ‘Bad Banks’, to be strict on companies defaulting and performing at loss due to their own mis-management and malfunctioning etc. It was also suggested to make the Disinvestment of companies in small phases through-out the year according to the changes in the market such that the targets can be attained and overall better returns can be ensured.

Along with the Finance Minister Shri Arun Jaitley, the aforesaid Pre-Budget Consultative Meeting with the Economists was also attended among others by Shri Jayant Sinha, Minister of State for Finance, Shri RP Watal, Finance Secretary, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Financial Services, Dr. Arvind Subramanian, Chief Economic Adviser (CEA). The Economists present during the meeting included Shri Abhijit Banerjee, MIT, Shri Partha Mukhopadhyay, CPR, New Delhi, Ms Rinku Murgai, World Bank, Shri S. Mahendra Dev, IGIDR, Shri Pulapre Balakrishnan, CDS, Thiruvananthapuram, Shri T.N. Ninan, Business Standard, Shri Ajit Ranade, Aditya Birla Group, Shri Sajjid Chinoy, J.P. Morgan, Ms. Sonal Varma, Nomura, Shri Niranjan Rajadhyaksha, Livemint, Shri Sunil Jain, Express India, Shri Rakesh Mohan, Shri Nitin Desai, Shri Soumya Kanti Ghosh, State Bank of India, Ms Pranjul Bhandari, HSBC, Shri Josh Felmen among others. 
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Finance Minister Shri Arun Jaitley: India has emerged among the few large economies in the world with a promising economic outlook; Economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root
We have achieved macro stability to large extent but the growth moderation in the global economy and policy uncertainties among advanced countries pose risk to this outlook.
The Union Finance Minister Shri Arun Jaitley said India has emerged among the few large economies in the world with a promising economic outlook. He said that the economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root. He said that we have achieved macro stability to large extent but the growth moderation in the global economy and policy uncertainties among advanced countries pose risk to this outlook.
The Finance Minister was making the Opening Remarks during the 14th Financial Stability and Development Council (FSDC) Meeting with the Financial Sector Regulators here today. FSDC Meeting was being held as part of the Finance Minister’s Pre-Budget Consultative process. The Finance Minister further said that FSDC has functioned in an effective and smooth manner in terms of achieving its twin objectives of ensuring financial stability while pursuing financial sector development in close coordination with all Members. He appreciated the efforts of each member in terms of pushing the financial reforms agenda and policies as also strengthening rules and regulations. 


Earlier, the Chief Economic Adviser Dr. Arvind Subramanian made a presentation on the state of economy. The Council reviewed the major issues and challenges facing the economy. Subsequent to this, the Regulators had offered their suggestions/ proposals for the upcoming Budget 2016-17, which were deliberated upon by the Council.

Many suggestions made during the aforesaid meeting with regard to the forthcoming Union Budget 2016-17 include to continue to follow-up  the path of fiscal consolidation along with quality spending of the public investment in order to achieve the higher rate of growth. Other suggestions include sufficient provision of funds in the forthcoming budget for recapitalization of banks in order to clean-up their balance sheets and exemption from service tax to life insurance premium. Other suggestions include continuation of the Government’s contribution in the premium for Atal Pension Yojana (APY) for another year and exemption from tax at time of final withdrawal under NPS at par with PPF and EPF among others.

  The Finance Minister Shri Jaitley appreciated the valuable suggestions made in the meeting for the Budget 2016-17 and for overall financial sector development.

The Fourteenth Meeting of the Financial Stability and Development Council (FSDC) held under the Chairmanship of the Union Minister of Finance, Shri Arun Jaitley was attended among others by Shri Jayant Sinha, Minister of State (Finance), Dr. Raghuram G. Rajan, Governor, RBI; Shri Ratan P Watal, Finance Secretary; Shri Shaktikanta Das, Secretary, Department of Economic Affairs; Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Department of Financial Services; Shri Neeraj Kumar Gupta, Secretary,Department of Disinvestment; Dr. Arvind Subramanian, Chief Economic Adviser (CEA); Shri U.K.Sinha, Chairman, SEBI; Shri T. Vijayan, Chairman, IRDA; Shri Hemant G Contractor, Chairman, PPRDA and other senior officers of the Government of India, and financial sector regulators.

           
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Constitution of an Empowered Committee of Secretaries to process the recommendations of the 7th Central Pay Commission 
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for setting up an Empowered Committee of Secretaries under the Chairmanship of Cabinet Secretary, in order to process the recommendations of 7th Central Pay Commission (CPC) in an overall perspective.

The Empowered Committee of Secretaries will function as a Screening Committee to process the recommendations with regard to all relevant factors of the 7th CPC in an expeditious detailed and holistic fashion. 


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