New Delhi: Union finance minister Arun Jaitley on Tuesday said he favours controlling fiscal deficit through expansion of economy and tax buoyancy rather than contracting expenditure. He said fiscal prudence is required to put the country’s economy back on track.
“If fiscal deficit goes out of control that would mean the nation is borrowing more to finance its current expenditure and will leave behind a legacy of debt,” he said during question hour in Rajya Sabha. The minister refused to give target for 2014-15 saying his Budget on Thursday will spell out those numbers.
“The level of fiscal deficit during current year (2014-15) up to May is Rs 2,40,837 crore which is 45.6 per cent of Budget estimate of 2014-15,” he said. He said the government has adopted roadmap for fiscal consolidation following amendment to the FRBM Act which provides for lowering fiscal deficit to 3 per cent of GDP. He said he personally favoured bringing down fiscal deficit by “expansion of economy and tax buoyancy rather than by contracting expenditure”. Despite several challenges, government has been steadfast in policy of fiscal rectitude. In the medium-term framework, the reduction in fiscal deficit has been designed with a judicious mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue as percentage of GDP,” Mr Jaitley said.
He also said tax collection drive will be intensified and there will be no laxity shown to those who owe taxes. However, exemptions from payment of IT to certain categories to give flip to industry were needed, he added.
