Union Budget 2019 India: At a time when fiscal slowdown has hit the economy, the government must focus on reviving tax collections, said a market analyst. The budget should look at controlling growth in spending and see how tax collections especially goods and services tax (GST) collections could be given a boost, Saurabh Mukherjea, Founder, Marcellus Investment Managers told Financial Express Online. Considering India’s current fiscal health, the economy needs a year of fiscal consolidation, he added.
“Looking at the data on hand regarding the government’s spending projections and FY19 tax collections, I believe the government should throttle off on spending growth and focus on tax collections especially GST collections. India’s fiscal position is worrisome and we need a year of fiscal consolidation,” he said.
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The May GST receipts by the Centre and state governments collected a tad over Rs 1 lakh crore, an improvement of 6.7 per cent from the corresponding month of the year ago period. However, it was below the growth rate needed by the Centre to avoid compensating states for revenue losses. Nearly Rs 1.14 lakh crore needs to be collected by the Centre and States every month this financial year, going by a 14 per cent notional GST revenue growth for states that the central government is committed to protect.
A majority of economists are of the view that Finance Minister Nirmala Sitharaman may come up with sops to boost economy in this budget. Measures to boost investment and demand, health of small businesses, including agriculture and housing, are expected to be key focus areas in the budget to be presented on July 5. It is expected that the finance minister may take into account global concerns including trade wars and crude oil prices while preparing the budget.