Laid foundation for $5-trillion economy in budget Sitharaman

Laid foundation for $5-trillion economy in budget Sitharaman

By / Business News / Monday, 10 February 2020 05:56

Finance Minister Nirmala Sitharaman on Sunday said the foundation for achieving the goal of USD 5 trillion economy by 2024-25 has been laid in the Union Budget which stressed on increasing capital expenditure for infrastructure.

“The majority of government investment is directed towards creating infrastructure and through various windows like health and agriculture to avoid any kind of rural distress. These will create the foundation for the USD 5 trillion economy,” she said.

Asked about rationalisation of rates of Goods and Services Tax, the finance minister said that it is being reviewed every three months by the GST Council.

To a query whether GST has been revenue neutral as was envisaged, the finance minister said, “The compensation rate was fixed at 14 per cent on the basis of certain level of calculation. However, collections have fallen and so there will be an impact.”

The compensation rate was fixed on the premise that the economy will grow by 12-13 per cent, she said. “But in the last two months, the economy grew less than that. However, the government will pay compensation within a time line,” Sitharaman said.

To a question about bringing petrol and diesel under GST, she said a lot of discussion had taken place when the new law was framed.

“My predecessor late Arun Kr Jaitley made a provision for making petroleum products zero-rated. When states are ready, there is no need for any amendment to bring petroleum products under GST and the Council can do that,” the finance minister said.

On liquidity to industry and NBFCs, she said every possible step is being taken to ensure that availability of cash does not become an issue.

“The government is closely monitoring lending by both public and private sector banks. Secretaries are continuously engaged with the banks and every possible step is being taken so that liquidity is available,” she said.

Asked about what West Bengal has received from the budget, she said, “I do not know how I answer this question of kisko keya mila . I am looking at the point of macroeconomic stability, building assets in the country, money directly going to hands of individuals because of reduced tax rates and so on.”Announcements were made in the budget about various projects which are happening in different states, the finance minister said.


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