The decision on FY20 fiscal gap target will be taken at the revised estimate stage, finance minister Nirmala Sitharaman said on Monday in Parliament.
The decision on the FY20 fiscal gap target will be taken at the revised estimate stage, finance minister Nirmala Sitharaman said on Monday in Parliament, adding the government has managed to keep fiscal discipline intact so far. It comes as the concerns are being raised on the government’s capacity to contain the fiscal deficit at the budgeted level. The fiscal deficit hit 102.4 per cent of the 2019-20 Budget Estimate at Rs 7.2 lakh crore at the end of October. The Centre estimated the fiscal deficit for the current financial year at Rs 7.03 lakh crore, aiming to restrict the deficit to 3.3 per cent of the GDP.
Adding finance minister said that the gross tax collections went up by 5 per cent till November. On credit, she said that the public sector banks disbursed Rs 2.52 lakh crore loans during outreach programme. Earlier in the day, Nirmala Sitharaman said that the government’s decision to reduce the corporate tax rate was aimed at attracting investment and creating jobs. The government’s decision was also necessary to attract investment from multi-national companies, which are wanting to shift operations from China in view of ongoing Sino-US trade war, she said while moving the Taxation Laws (Amendment) Bill, 2019 for consideration and passage.
The Bill seeks to replace the Ordinance which was promulgated by the President in September. The government through the ordinance reduced the corporate tax rate from 30 per cent to 22 per cent, and for new manufacturing companies to 15 per cent. The companies opting for lower tax rates, however, will not be entitled to claim any rebate or deductions. “We think we will attract investment by reducing tax rate”, she said while stressing that several neighboring countries and emerging nations have reduced tax rates to attract investment.