Modi’s economic review meet: Continuing the various measures taken to curb the rupee depreciation and the widening CAD, the government today, took stock of tax collections, capex and fiscal deficit targets, among others. Here are the key takeaways.
Modi’s economic review meet: After the Narendra Modi-led government announced various measures to control current account deficit and shore up the rupee, another internal meeting was held today to take stock of the broad parameters of the economy, and analyse the positions with regard to tax collections, capital expenditure and fiscal deficit targets.
“There were some decisions taken, and some issues pending consideration. Those decisions were informed to you yesterday. The primary focus of yesterday’s meeting were with regard to the current account deficit. Today was an internal meeting in which the Prime Minister took a review, of the various departments under Ministry of Finance,” Fm Arun Jaitley told reporters after the internal meet. Notably, detailed presentations were made by Department of Economic Affairs, the Department of Revenue, Department of Expenditure as well as DIPAM.
“The Prime Minister expressed his satisfaction with respect to the broad parameters of the economy, and the macro-economic data, which is so far emerging for this year. The government is confident and will maintain the fiscal deficit target,” Jaitley added.
Explaining the current position with regard to the capital expenditure, Jaitley said that about 44% of the budgeted expenditure has been spent. “We will maintain the 100% capex for the year, as it’s necessary for achieving the growth rate. The government is confident that we will have a growth rate higher than what was projected in the budget,” he noted.
In his address, Jaitley said that the government is confident of surpassing the 7.2-7.5 per cent GDP growth rate projected in the Budget for 2018-19. “We are seeing the impact of all anti-black money measures taken, as we are ahead of schedule on direct tax collections. There has been a significant increase in the number of assessees, and the CBDT is clear that we will get more tax inflows than budgeted for the year,” he noted. He also exuded confidence of surpassing the Rs 1 lakh crore target from disinvestment proceeds.
The economic review meet conducted today was in continuation of the slew of measures announced yesterday to check the widening fiscal deficit, and stem the depreciating rupee. Notably, in the economic review meeting chaired by PM Modi yesterday, the government announced various steps including scrapping withholding tax on masala bonds, reduce non-essential imports, provide ECB access of up to $50 million for to manufacturing entities from maturity of one year, review mandatory hedging conditions for infra loans with respect to External Commercial Borrowings and removal of exposure limit of 20% of Foreign Portfolio Investors’ corp bond portfolio to a single corp group and 50% of any issue of corp bonds.