Government to cut down non-essential imports: Arun Jaitley

GST Narendra Modi

The Departments of Economic Affairs Revenue Expenditure Banking and Disinvestment made detailed presentations at Saturday’s meeting

"We will stick to fiscal deficit target", Jaitley said, adding that the capital expenditure targets will also be met.

"The government is confident and will strictly maintain the 3.3 per cent fiscal deficit target", Jaitley told reporters after the over three-hour long meeting.

These assurances were given after the Prime Minister Narendra Modi reviewed the economic situation with the Finance Minister Arun Jaitley and other senior Cabinet Ministers.

The government has targeted a 14.43 per cent increase in direct tax collections at Rs 11.5 trillion in 2018-19 against Rs 10.05 trillion the previous year.

In a message clearly aimed at allaying market concerns that a confluence of factors could derail the Indian economy, Arun Jaitley said on Saturday the government is sure of meeting the fiscal deficit target given robust tax collections. Though it is less than 92.4 per cent of the last fiscal, but problem is that revenue from Goods and Services Tax (GST) is below expectations and being the election year, expectation that there will be more expenditure.

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Review of mandatory hedging condition for infrastructure loans as already touched 86.5 per cent of the full year's target of Rs 6.24 lakh crore.

Claiming that Inflation is under control, the Finance Minister further said,"The govt is confident that we will have a growth rate higher than what he had projected earlier this year in the budget".

It feels that the country can not afford to have a twin deficit problem - a depreciating rupee and high crude import bill putting pressure on the country's current account deficit (CAD), and a fiscal slippage.

He added that CBDT was "very clear" that this year the government would be able to collect taxes in excess of the budgeted target. On Saturday, the meeting reviewed revenue and expenditure positions. And even though we had a stiff target for direct tax collection, we can now see the impact of all the anti-black money measures which we had taken, like demonetisation and the GST. The government, in a meeting chaired by Prime Minister Narendra Modi, also made a decision to remove restrictions on external commercial borrowings, masala bonds to control the current account deficit, which slipped for the first time in six quarters in April-June. There is a phenomenal increase in assesses base. "With the kind of pickup in consumption which has taken place, it will have an impact on GST collection in future months". On August 31, the Controller General of Accounts (CGA) said the fiscal deficit for April-July was Rs 5.40 lakh crore. Notably, no Masala bond has been issued so far in the current fiscal.

Economic Affairs secretary Subhash Chandra Garg said, while it is hard to give a specific number, it should have an impact of $8-10 billion.

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