Will respond to sector-specific issues in the budget, says FM Sitharaman
The Union budget is scheduled to be presented in Parliament on February 1 next year, which is a Saturday, parliamentary affairs minister Prahlad Joshi said.Updated: Dec 14, 2019 01:33 IST
Hinting at more policy measures to boost the economy, finance minister Nirmala Sitharaman on Friday said she will start pre-budget consultations from Monday, and will respond to sector-specific issues accordingly in the budget.
The Union budget is scheduled to be presented in Parliament on February 1 next year, which is a Saturday, parliamentary affairs minister Prahlad Joshi said.
Addressing a press conference on the state of the economy on Friday, Sitharaman listed the measures announced by the government to boost the economy in response to sector-specific needs. “We have responded to issues faced by the economy. If need be, I will do more. As of now no other sector has approached me as yet with their specific problems,” she said.
“As regards to sectors, till now, I think, across the board, those who [have] spoken to us and demanded some kind of interventions, we responded to them. I’ll be very keen to see if these steps are really meeting the expectations of the sectors concerned. If not, I will see if I need to do more,” she added.
Sitharaman declined to comment on the outcome of the 32 rounds of economic measures taken by the government since August 2019 to boost sagging growth. India’s gross domestic product (GDP) grew at 4.5% in the July-September quarter (Q2 2019-20), the lowest since March 2013.
According to the recent official data, retail inflation rose to 5.5% in November, while factory output contracted to 3.8% in October.
Sitharaman declined comment on the specific timeline for the economic recovery. “I am not engaging in any prediction-based questions. I am looking at the economy and I’ll continue to address the problem of the industry and any crisis. I am here to intervene when needed,” she said.
Sitharaman said the government is committed to pay compensation to states under the goods and services tax (GST) regime. States and Union territories were paid ₹28,000 crore compensation for June-July and are awaiting the payment for August-September, which was due in October.
According to government officials, the delay is mainly because of revenue shortfall. GST revenue, which is a tax on consumption, slumped below ₹1 lakh crore after July this year and remained subdued for three months before bouncing back to ₹1,03,492 crore in November.
The finance minister also declined to comment on the modalities to ramp up revenues, including a GST rate hike, to make the payment.
She said the finance ministry has not taken any call on raising GST rates. “There has been no discussion of changing the GST rate in the finance ministry so far,” she said. Hindustan Times reported that the GST Council could move to three-slab tax rates—8%, 18% and 28%—in place of current slabs of 5%, 12%, 18% and 28%.
Earlier, presenting detailed status report on the impact of various stimuli on the economy since August 2019, chief economic adviser (CEA) Krishnamurthy Subramanian said the government took several measures to boost consumption. It sanctioned a ₹4.47 lakh crore support to non-banking financial companies (NBFCs) and housing finance companies (HFCs), including ₹1.29 lakh crore for a pooled buyout of assets, he elaborated. The government also pushed its departments and state-run firms to clear at least ₹61,000 crore due to vendors, he added.
Subramanian said, the Reserve Bank of India’s (RBI’s) instructions saw banks introduce repo rate-linked loan products with 8.18 lakh loans worth ₹72,201 crore being disbursed till November 27, 2019
He said “continuous liberalisation” has helped in attracting $35 billion worth of foreign direct investment (FDI) in the first half of the current fiscal year as compared to $31 billion in the same period last year.
Speaking about reform in India’s taxation system, revenue secretary Ajay Bhushan Pandey said, expeditious issuance of income tax refunds has also helped the cause of consumption. The Income Tax Department has refunded ₹1.57 lakh crore in the first eight-and-a-half-months of the current fiscal year compared to ₹1.23 lakh crore in the entire 2018-19. He said integrated GST refund of ₹38,988 crore has been released so far in the current fiscal year against ₹56,057 crore in all of 2018-19.
Pandey added that the government is committed to the ease of doing business. In order to dissuade overreach of tax authorities, it has introduced faceless assessment to reduce the interface between the taxpayer and tax officers, he said in his presentation.
“Faceless assessment has been launched on October 7, 2019. Total number of cases to be assessed under the scheme is 58,322 and questionnaire in the faceless manner has already been issued in 19,883 cases.”