The former chairman of the Prime Minister's Economic Advisory Council (PMEAC) C. Rangarajan has asked how the Centre would contain the fiscal deficit at 4.1 per cent of Gross Domestic Product (GDP) as the Union Budget 2014-15 does not spell out any specific policy on subsidies.
Delivering the inaugural address at an interactive post-Budget meeting organised by the Southern India Chamber of Commerce and Industry (SICCI), he said , “What is missing in this budget is a strong commitment to contain fiscal deficit. Containing fiscal deficit means strong action on subsidy is required. But there is no clear statement how it will be done in the context of rising fuel subsidy. There is also a need to take a relook at the cap of 12 subsidised LPG cylinders in a year, diesel and urea prices. There are milestones, but no road map,” he said.
Stating that the budget was in continuation of the previous regime, he said many of the tax proposals were welcome as several of them are in the nature of introducing transparency. Uniform tax rate with respect to withholding tax on all bonds issued by Indian corporates abroad is also a good recommendation. But there are some important policy decisions, such as on land acquisition, environment and coal production, he added. Dr. Rangarajan said “The Centre’s intention to contain fiscal deficit is a good one. We have to watch how it will be fulfilled. If the revenue plans fall short of expenditure, the Centre has to have in place an alternative expenditure plan. Besides, it should complete the existing projects and defer the new ones.”
