The focus should now shift to execution
The finance minister has talked the right language in the Budget to set the goals. But the focus now will have to be on execution and implementation.
The FM has focussed on improving the abysmally low tax-to-GDP ratio of around 10% by laying the roadmap of GST, bringing more services under the tax net and setting the date for DTC. Now if he can focus on collection through improved governance then his target of 24%-plus tax collection (far more than 14%-plus nominal GDP growth) can be achieved.
The FM has aimed at targeting subsidies through better governance. Implementation of UID project and setting up a task force for making direct transfer to BPL families could be a game changer. If the government can make diesel and cooking gas prices market-linked, then the provision for oil subsidy is reasonable.
The targeted fiscal deficit at 4.6% is lower than expected, partly due to aggressive estimates on the revenue side and a conservative estimate of the expenditure side. The government’s commitment to medium-term fiscal targets at 3.5 % for FY14 is reassuring to investors.
Measures like opening up of equity funds for foreign citizens, setting up of infrastructure funds for foreign investors at nominal tax rates and enhancing the
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