Union Budget 2019 India: Signalling the government's willingness to greater engage experts and economists to gather inputs for policy-making, Niti Aayog has convened a meeting on June 22, to be addressed by Prime Minister Narendra Modi.
Union Budget 2019 India: Economists on Friday impressed upon the government to keep Budget projections realistic, reflecting the true state of the economy. In a pre-Budget consultation meeting with finance minister Nirmala Sitharaman, the economists, however, appreciated the government’s keeness to get their views on extra budgetary resources that have come under heightened scrutiny of analysts for their potential to undermine fiscal prudence. They also asked the government to cut corporate tax and impress upon the central bank to prune the repo rate further.
Signalling the government’s willingness to greater engage experts and economists to gather inputs for policy-making, Niti Aayog has convened a meeting on June 22, to be addressed by Prime Minister Narendra Modi. The experts will deliberate on economic growth and development throughout the day.
As for the budget numbers, the slide in the government’s actual gross tax revenue in FY19 from the revised estimate (RE) was the sharpest at least since the UPA-I, as it could mop up only 92.5% of the RE. The wide gap between the RE (made towards the end of the fiscal) and the actual tax revenue put the sanctity of the Budget numbers into question. Also, as FE had reported last week, in the face of an 11.3% shortfall in tax revenue against the RE, the centre cut budgetary expenditure by `1.45 lakh crore or about 6% and reported that it stuck to the FY19 fiscal deficit target (RE) of 3.4% of the gross domestic product (GDP). However, if the spending of `1.4 lakh crore, undertaken out of extra-budgetary resources, is included — strictly speaking, it must be — the deficit would have been higher at 4.1% of the GDP.
In a statement, the finance ministry said on Thursday that the economists put forward their views on various issues, including ‘tariff reforms, removing bottlenecks in supply-chain, Exim policy for agriculture, removal of specific duties on textiles, maintaining fiscal consolidation, revival of inter-state councils for holistic domestic growth, boosting employment by focusing on skills and giving fillip to services and manufacturing sector, macroeconomic stabilisation and structural reforms for long-term growth and stability of tax rates’.
Further simplification of GST, implementation of the direct tax code, promoting labour-intensive sectors and Insolvency & Bankruptcy Code-type framework for non-banking financial companies, too, came up for discussion.
Apart from the finance minister, the meeting was attended by Niti Aayog vice-chairman Rajiv Kumar, finance secretary Subhash Chandra Garg and other top finance ministry officials.