Govt will maintain 3.3% fiscal deficit target: Jaitley

Arun Jaitley,PM Modi economic review meeting,Finance minister

Arun Jaitley,PM Modi economic review meeting,Finance minister

Jaitley's commitment to maintaining the budget targets in a pre-election year also in a way rules out any cut in excise duty on petroleum products which have been rising keeping in pace with global crude oil prices. However, till now finance ministry has resisted pressure to cut taxes on fuel. This was second successive days of high level meeting on economy.

The government has chose 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.

At Saturday's meeting detailed presentations were made by Departments of Economic Affairs, Revenue, Expenditure and Disinvestment.

Notably, Saturday's meeting came a day after the Prime Minister Modi discussed with Jaitley and Finance Ministry officials the current economic situation after which the Finance Minister announced five measures to curb the widening current account deficit besides a policy to limit non-essential imports and to encourage exports.

"The government is confident and will strictly maintain the 3.3 per cent fiscal deficit target", Jaitley told reporters after the meeting. "I think it should have an impact of $8-10 billion", he was quoted as saying by PTI.

"We are confident of maintaining the divestment target too", Jaitley said, adding that both demonetisation and the Goods & Services Tax (GST) had started yielding results. Direct tax collections will be in excess of budget target. "There is phenomenal increase in the assessee base.in the quantum of advance tax which has been paid", he said. He claimed that GST is settling down. "With the kind of pickup in consumption which has taken place, it will have an impact on GST collection in future months".

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The finance minister tried to assuage investors that economic growth would not be compromised while containing the fiscal deficit.

He added, "As far as the fiscal deficit is concerned, we are confident that we will meet the 3.3 percent target". He said that during a presentation given by RBI it was said that India's growth is fast compared to other economies and inflation was also in moderate rage.

On Friday, the Minister outlined a slew of measures aimed at stemming a decline in the rupee - the worst-performing Asian currency this year. Notably, no Masala bond has been issued so far in the current fiscal.

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.

A 71% increase in income tax return filers before the 31 August deadline this year of 5.42 crore compared to the number of filers in the same time a year ago hints at improved direct tax compliance.

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