Cabinet committee to clear projects to get the wheels of economy moving

Brushing aside even suggestive talk of early polls, Union Finance Minister P. Chidambaram on Saturday laid down the contours of the UPA II government’s reforms agenda in the remaining period of its five-year term with the objective of moving full steam ahead for implementation.

At an all-encompassing press conference here a day after the announcement of expansion of the UPA’s flagship Direct Benefits Transfer (DBT) programme and armed with heartening news on the tax collection front, Mr. Chidambaram exuded confidence on pressing ahead with reforms.

The government’s intention, Mr. Chidambaram indicated, was not only passage of laws on insurance and pension with the Opposition support along with review of the FDI cap on various sectors but also a slew of executive decisions by the Cabinet Committee on Investments to unshackle a host of projects for implementation to get the wheels of the economy moving.

For one, the fiscal deficit for 2012-13, the Finance Minister said, would be better than 5.2 per cent of the GDP as the tax collection target of over Rs 10.38 lakh crore has been achieved. “As always, there will be some savings [on expenditure]. So what does it mean ... if we reach the revenue target and if there are some savings, the fiscal deficit will be better than 5.2 per cent that I have projected,” he said without hazarding “a guess” on the actual number for 2012-13.

Asked if the over one-lakh letters sent by the Income Tax department to non-filers was paying dividends, Mr. Chidambaram said: “I think our non-adversarial and taxpayer-friendly approach is paying off. These very kind and loving letters are paying off and people are filing returns. The number of e-returns filed in 2012-13 has increased by over 50 lakh to more than 2.14 crore against the previous fiscal.”

With “commendable” revenue growth in the “difficult year” of 2012-13 when the economic growth was expected to be five per cent or a shade above it and along with savings in expenditure, Mr. Chidambaram expressed confidence that the revenue target for 2013-14 financial year would also be achieved as the GDP growth was likely to be over six per cent.

Besides, the worrying Current Account Deficit (CAD) would be “more tolerable and acceptable.” The CAD, which reflects the gap between outflow and inflow of foreign currency, had touched a historic high of 6.7 per cent in the third quarter of 2012-13 owing to higher imports of oil and gold and muted exports.

Vodafone case

As for the Vodafone taxation case, the Minister said the amendments to the I-T Act would be moved in Parliament after a way was found to resolve the issue but felt the chances of amendments being moved in the ongoing Budget session were unlikely.

As for the Bill to raise the FDI cap in the insurance sector to 49% from the current 26 per cent, Mr. Chidambaram hoped that it would be passed soon. His optimism stemmed from the fact that there was a difference of opinion only with regard to one clause over which he was in touch with the main opposition party BJP for sorting it out. “Once the BJP agrees, then the government will talk to other parties,” he said.

DBT expansion

On the expansion of the DBT to LPG cylinders, Mr. Chidambaram said he would meet Petroleum Minister M. Veerappa Moily soon to decide on its roll-out. Once the scheme is implemented, domestic cooking gas consumers will get close to Rs. 4,000 yearly to enable them to buy nine cylinders at market price.

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