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Jaitley blames fiscal slippage on structural reforms

Author: IANS/Friday, February 2, 2018/Categories: Economy

Jaitley blames fiscal slippage on structural reforms

New Delhi, Feb 1 - Even as the government on February 1 admitted slippage in the fiscal consolidation path, Finance Minister Arun Jaitley said it was "substantially statistical and partly due to structural reforms".

Jaitley's remarks came after the government revised upwards its fiscal deficit target for 2017-18 from 3.2 per cent to 3.5% of the GDP.

"Don't forget for a 12 month year, my direct tax revenue is for 12 months. 

"But this being the first year of the GST, this factor in only 11 months of GST revenue. Because of this, I am inherently Rs 36,000 crore short. March GST revenue will be counted in April," Jaitley told reporters.

He added there has also been some shortfall in non-tax revenues on account of certain developments, including deferment of spectrum auction. 

However, he added, a part of this shortfall had been made up through higher direct tax revenues and bigger disinvestment receipts.

"It (fiscal deficit) was supposed to be 3.2% but is 3.5%. The 0.3 difference -- a very large part of it is statistical because of shortfall of one month of GST revenue.

"I have not allowed it to grow in any single year, not even in this year. This year you can call it an aberration partly because of structural reforms and substantially because of this statistical switch-over that has taken place," he added.

Jaitley also dismissed reports of linking the 2018-19 Union Budget with the 2019 general elections.

"I won't link this budget with elections. If you look at the economic scenario, our services sector is strong and doing well. There has been improvement in manufacturing lately. 

"So it is natural to look at and strengthen the weaker areas. There is serious concern when it comes to agriculture sector," Jaitley said. 

He said to double farmer incomes by 2022, there was a need to improve infrastructure in rural areas and ensure that the farmer gets fair price for his produce.

"There is also a need to move beyond band-aid solutions like loan waivers as they provide temporary relief. So to give him 50% profit on cost, it is an attempt towards that," Jaitley said.

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Kavita Giridhar Mallya

IANS

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