Finance Minister P Chidambaram tried to downplay the final Budget of UPA’s current term in his media interaction, saying that Budget was simply one event in a series of actions. He promised that another set of measures will be announced during the debate on the Finance Bill .
Chidambaram said that the economy was likely to grow below 5 percent during second half (October-April) of the current fiscal.
The GDP reading for the October-December quarter has come in at 4.5 percent, and given the sharp reduction in plan expenditure for FY13, the current quarter is also likely to see anemic growth.
Chidambaram said that while the Budget did not have any great surprises, fears of being too focused on fiscal consolidation were overblown. The expenditure estimate for next fiscal is Rs 16,65,297 crore and with plan expenditure at Rs 5,55,322 crore.
He said that exports would have to pick up for current account deficit to be narrowed, and that the government would support all measures to boost exports. Chidambaram said it was not possible to restrict imports in the short term. Oil and gold account for a sizeable chunk of India’s import bill, and it was widely expected that there would be additional import curbs on gold in the Budget.
He expressed hope that a correction in diesel prices would help keep the subsidy bill in check.
He said the Centre could not lay any deadline for introduction of the Goods and Service Tax, as it was up to the states to arrive at a consensus. He said the Direct Tax Code Bill would be introduced in the current Budget session of Parliament.
On foreign investors having to disclose beneficial ownership in order to avail of Double Taxation Avoidance Agreement (DTAA), Chidambaram said the aim was not to spook any section of investors and that it had nothing to do with the General Anti-Avoidance Rule (GAAR)
He said the government was targeting Rs 40,000 crore through the divestment programme next fiscal, excluding Rs 14,000 crore of residual stake sale in some companies where it owns a minority stake.
On the decision to levy a surcharge on those with a taxable income over Rs 1 crore, Chidambaram said he did not think it would lead to tax evasion.
The Budget has estimated around Rs 13,300 crore in FY14 by way of its direct tax proposals, with a significant chunk of it coming from this surcharge.
