New Delhi: Industry body CII has suggested that the government should explore non-tax options for garnering revenue, while expressing hope that Finance Minister Arun Jaitley would keep a tight leash on spending in the Budget to keep fiscal deficit under control. Underscoring the significance of reining in the fiscal deficit, CII Director General Chandrajit Banerjee said that "a restrained fiscal deficit would keep inflationary tendencies under check and facilitate 'crowding in' of private investment, thereby strengthening the recovery process".
Jaitley will unveil the first full budget of the Narendra Modi-led government on February 28. In its suggestions for the Budget, CII has requested the government to explore non-tax options for garnering revenue. Some such non-tax revenue options include hastening disinvestments, effecting dilution of residual government shares in private companies as well as going ahead with sale of spectrum and mineral blocks. Another revenue generating measure is to flag-off strategic sale of loss-making PSUs.
"Many of these units are in the non-strategic sectors where the presence of state serves little public purpose besides being a drain on the exchequer. "Further, the Finance Minister would do well to start the process of monetising unutilized and underutilized government land available with railways, port trusts, etc and the money accrued could finance infrastructure development in the country," CII said.
Banerjee said the budget can "look to pare the government stake in public sector banks to 51 per cent. This would facilitate capital infusion and efficiency in public sector banks. In fact, we would go so far as to suggest that the government should consider bringing its stake below 51 percent in the future and still hold control".
He added that on the expenditure side, the Finance Minister could announce a roadmap to bring the subsidy burden down to 1.5 per cent of GDP from the current level of 2.3 per cent over the next two years. The amount saved could be diverted towards incurring the much needed capital expenditure. CII has said that the Budget should follow strict budgeting to ensure that the amount allocated is not exceeded.
The prices of subsidised items should be raised if the target is exceeded. This model of curbing runaway subsidy bill could also be emulated by the states. The implementation of Aadhar in a time-bound manner would be the best possible antidote to plug leakages and ensure that the potential of direct benefit transfer is fully utilized. Government should desist from announcing new schemes where fund allocation could be a challenge, it said.
