Ahead of presenting his maiden budget, Union Finance Minister Arun Jaitley on Tuesday said he was in favour of controlling fiscal deficit through expansion of economy, tax buoyancy and greater tax collections, rather than by contracting expenditure.
Replying to supplementaries during question hour in the Rajya Sabha, he said fiscal prudence was required to put the country’s economy back on track.
“Fiscal deficit has to be maintained at acceptable levels,” he said, but declined to give the target for 2014-15, saying his budget on Thursday would spell out the numbers.
“If fiscal deficit goes out of control, it means the nation is borrowing more in order to finance the current expenditure and spending beyond its means. Therefore, fiscal deficit has to be maintained at an acceptable level and the current acceptable level is that you have to move towards 3 per cent of the GDP. Currently, States are doing better than the Centre,” he said.
“Controlling fiscal deficit will have to be a judicious mix of expenditure as well as revenue collections,” he added.
To a question on whether rationalisation of expenditure would mean deferring Income Tax refunds for years, Mr. Jaitley said, “Those who are supposed to pay tax must pay tax and those who are supposed to get refunds must get refunds.”
