The government will watch its step as it rolls back tax breaks and other incentives announced last year to help the economy tide over the blow of a worldwide recession, linking their exit to growth in the domestic economy in the coming months, Finance Minister Pranab Mukherjee said here on Friday.
He also signalled that the country’s most ambitious tax reform initiative—a comprehensive nationwide uniform goods and services tax (GST)—might miss its April 1, 2010 deadline as some contentious issues were yet to be resolved.
“I will present my views on the exit policy on fiscal stimulus packages at the G-20 meeting next Saturday,” Mukherjee (74) told the annual Hindustan Times Leadership Summit.
Finance ministers of G-20, the group of world’s elite economies are due to meet at St. Andrews, Scotland over the next weekend to discuss issues of a global financial regulatory architecture and economic growth in the aftermath of the financial meltdown that hit banks and lending worldwide.
The government had announced a slew of tax breaks including a 4 per cent excise duty cut on several products amid the world economy’s worst slowdown in the last 80 years.
“I will have to watch the situation of progress in the second and third quarters after which I may be in a position to take a call,” Mukherjee said while addressing a session on ‘Reviving India’s economy: critical factors.’
On the proposed GST, which is envisaged to be a comprehensive value added tax on goods and services, Mukherjee said a consensus eluded states on some areas.
“In large areas we have been able to arrive at convergence of views. Constitutional amendments are required (for rolling out GST). I am trying to stick to the time schedule, but there could be some slippages,” he said.
States' finance ministers will be meeting Mukherjee next month, while an empowered group of Central ministers are working on a paper to lay down a plan.