FM Jaitley says Times Are Good for Taking India’s Growth to New Level

By Sarkaritel March 17, 2015 17:23

FM Jaitley says Times Are Good for Taking India’s Growth to New Level

Projects 7.4% GDP growth for current FY15 fiscal and 8.5% for FY 16

By TN Ashok   Economics Editor

New delhi, March 17 : Finance Minister Arun Jaitley today said times were good for taking India’s growth to a new level and predicted a 7.4% GDP growth for the current fiscal ( April 2015 to March 2016) and 8% for the next fiscal.

@ Inflation is broadly under control and all indicators point to a growth to the next level. Investors are positive about India and its investment climate currently @, Jaitley said while replying to the debate on the Budget 2015-16, He also moved the demands for grants pertaining to his ministry . The house adopted the demands and bills to appropriate monies for the fiscal year.

Jaitley is expected to reply to most of the concerns expressed by the industry or the individual tax payers about any further tax breaks while moving the finance bill and replying to the debate on it in the 2nd leg of the parliament sessions that will resume in April after the recess from March 20. The budget session  is scheduled to conclude on May 08.

Jaitley observed that he had provided for additional tax exemptions to the tune of Rs 1.70 lakhs in the last two budgets , that is the budget of 2013-14 and 2014-15 this year. The FM observed that states would get 62% of total taxes collected by both central government and the states. The central government currently supports 23% of schemes fully. Allocation to states would be of the order of Rs 1.35 lakh more than last year.

Referring to fiscal deficit of states, Jaitlye said fiscal deficit of states would be 2.3% , which is better than what data project.

The Finance minister reiterated that majority of states would gain from implementation of the 14th Finance Commission recommendations that had suggested a 10 % hike in devolution of funds to them. “Every state’s earning more following the recommendation of the 14th Finance Commission. . .,” Jaitley had said monday  while intervening in a debate on General Budget in the Lok Sabha.

When a TRS member K Kavitha said allocation for Telengana had come down after taking into account the budgetary allocation and devolution of funds as per Finance Commission recommendations, the Finance Minister said that because of one state, I cannot go back to the 13th Finance Commission recommendations”.

The TRS member pointed out that there was “a Rs 777-crore (Rs 7.77 billion) loss (in terms of central funds) to Telangana in 2015-16 fiscal” and added that the state plan allocation had declined from Rs 3.37 lakh crore (Rs 3.37 trillion) to Rs 1.96 lakh crore (Rs 1.96 trillion).

Jaitley in reply said that there were instances of states standing to gain under the new method, saying that for West Bengal the devolution was Rs 27,962 crore (Rs 279.62 billion) in 2014-15, which would rise to Rs 49,079 crore (Rs 490.79 billion) in 2015-16.

For Andhra Pradesh, it would go up to Rs 30,530 crore (Rs 305.3 billion) in next fiscal, from Rs 15,720 crore (Rs 157.2 billion) in 2014-15.

“If any state wishes to go back to the 13th Finance Commission recommendation, we (Centre) would have more money in our pocket,” Jaitley said.

The 14th Finance Commission has upped by 10 % the states’ share in Union taxes to 42 %  accepted by the Centre. This will give the states an additional Rs 1.78 lakh crore (Rs 1.78 trillion) in 2015-16. The Commission, headed by former RBI Governor Y V Reddy, had also recommended a grants-in-aid of Rs 48,906 crore (Rs 489.06 billion) for 11 revenue deficit states, including Andhra Pradesh post-division, West Bengal and Jammu and Kashmir, for 2015-16.

For the period up to 2020, it will be over Rs 1.94 lakh crore (Rs 1.94 trillion).

The total devolution to the states in 2015-16 will be Rs 5.26 lakh crore (Rs 5.26 trillion), as against Rs 3.48 lakh crore (Rs 3.48 trillion) in 2014-15, representing an increase of Rs 1.78 lakh crore (Rs 1.78 trillion), while the total devolution to states during the five year period up to 2019-20 will be Rs 39.48 lakh crore (Rs 39.48 trillion).

The NDA government’s first full-fledged budget had come under attack in Lok Sabha from the opposition, which called it pro-rich-corporate and generally antii-poor, anti-middle class.

Opposition parties led by Congress, AIADMK, Trinamool Congress, BJD, CPI(M) and TRS were critical of the government’s budget saying it was slanted as it bestowed benefits on the corporate and focused on enhancing FDI while reducing allocation for social welfare and anti-poverty programmes.

Jayadev Galla, TDP member, ally of NDA, felt the Centre had fallen short by Rs 3,266 crore in its provision to the state based on the Finance Commission recommendation. Even as the  Finance Commission suggested  Andhra Pradesh be given Rs 24,000 crore,  the state got  just Rs 22,000 crore.

BJP members however stoutly defended the budget saying much of opposition criticism was criticism for the sake of criticism. Opposition members raised issues such as increase in service tax, status quo in income tax slabs and governments failure to pass on the benefit of falling crude prices by reducing petroleum prices to consumers.

Some non-NDA and non-Congress members went to the extenct of saying the NDA government had merely repackaged UPA’s budget. Veerappa Moily (Cong), former petroleum and natural gas minister, said most of the initiatives announced in the budget began during UPA’s regime. . The BJP government has been lucky because of the fruits of low oil prices and the award of the 14th Finance Commission, which was set up by the previous regime.

By Sarkaritel March 17, 2015 17:23