Prudence rewarding, but some steps can’t wait: FM Arun Jaitley

By: | Published: January 18, 2019 6:23 AM

Arun Jaitley on Thursday scotched rumours that the upcoming interim Budget could turn out to be fiscally expansionary despite repeated assertions to the contrary

Arun Jaitley , finance minister arun jaitleyArun Jaitley

Arun Jaitley on Thursday scotched rumours that the upcoming interim Budget could turn out to be fiscally expansionary despite repeated assertions to the contrary, reports fe Bureau in Mumbai. Addressing a gathering of industry leaders in Mumbai via video conference from New York that allayed apprehensions over his ‘ill-health’, Jaitley dropped enough hints that the widely reported farmers’ package could feature in the Budget.

A few reports had suggested he might not present the interim budget as scheduled on February 1 due to heath issues.

“The efforts are to move on the (fiscal) glide path unless an unusual situation arises,” he said, but hinted that exercise may not be devoid of some big-ticket announcements that “can’t wait,” he said.

“The larger interest of the nation dictates what will be a part of the interim Budget,” he said.

“Farm sector has been facing challenges. Prices have fallen. Food product prices have gone down,” he said. Markets, he said, would understand the government’s approach is rational, not populist.

The finance minister acknowledged the inadequacy of 7-7.5% annual GDP growth to meet people’s aspirations and sought to lift it above 8% through more reforms in areas like agriculture and infrastructure, in an indication of the government’s likely focus in the interim Budget, and beyond should it get re-elected.

The minister refrained from seeking a rate cut by the Monetary Policy Committee (slated to meet in early February) but added that the country’s real interest rates must not remain among the highest in the world.

“Fiscal prudence (and) consolidation is always rewarded and we have stuck to fiscal prudence. In exceptional situations like last year when we received GST collections for (only) 11 months, we had deviated a bit to 3.5% from target of 3.2%,” the minister said. The government last year proposed to meet the 3% fiscal deficit target–which was supposed to be achieved in FY19 — in only FY21.

Speaking on the threat of Opposition unity and the ruling coalition’s prospects at the hustings, Jaitley said, “As we go to the general elections, India needs to have a continuity of policies, stability and decisiveness.” According to him, the government has succeeded in restoring credibility of the economy and its decision making process over last few years.

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The minister refrained from seeking a rate cut by the Monetary Policy Committee (slated to meet in early February) but added that the country’s real interest rates must not remain among the highest in the world.
The government is reportedly considering an income support scheme for farmers at the national level, in what could largely be modelled on a few state-level initiatives in this regard, like Telangana’s Ryhthu Bandu and Odisha’s Kalia.

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