Finance Minister Arun Jaitley said India remained one of the fastest-growing economies in the world despite the global economy remaining uncertain.
There was still potential for India to grow at a faster pace, he added.
“All the major economic organisations, including IMF, have predicted low growth for the world economy in the coming year,” Mr. Jaitley said on Friday. “These developments have implications on India’s economy as our exports are also affected. However, the silver lining is low international commodity and oil prices which, in turn, have helped in a better macroeconomic situation in the country,” he said while making the opening remarks at the first meeting of the consultative committee of the Finance Ministry.
Regarding the fiscal deficit, Mr. Jaitley said that the government was on track to meet the 3.9 per cent of GDP target set for the financial year.
“This was the first time that the real expenditure amount was higher than the budget proposal. This year we have spent more but still we will very well manage our deficit targets,” he said.
Mr. Jaitley said that during 2016-17, the government had to make provision for around Rs. 1.10 lakh crore to meet the liabilities on account of implementation of Seventh Pay Commission recommendations and One Rank One Pension (OROP) Scheme.
One major suggestion by the Committee regarding taxation was to raise the tax exemption limit for middle and salaried class from Rs.2.5 lakh to Rs. 4 lakh. In addition, greater emphasis is to be laid on widening the tax base and punishing tax evaders.
The Committee also suggested that the threshold limit for mandatory PAN card requirement for transaction be raised to Rs.5 lakh and above from the current limit of Rs.2 lakh and above. Further, it was suggested that the service tax exemption limit be raised from Rs.10 lakh to Rs.25 lakh.
Other important suggestions made by the Committee included more allocations for agriculture sector and the setting-up of an Indian Council for Veterinary Research (ICVR) to boost to milk production.
Another suggestion was to bring in more clarity to and awareness about the government’s new crop insurance schemes.
Regarding the environment, the Committee suggested that the forthcoming budget give relief to industries to set-up sewage and effluent treatment plants. Other suggestions included more allocations for drip irrigation systems to save water.
Some members also suggested that greater focus be given on providing employment opportunities in rural areas.
