Revival of economy has started: Arun Jaitley

New Delhi: The government has managed to bring current account deficit within "comfort level" with help from falling oil prices, Finance Minister Arun Jaitley has said and added that economic revival has begun.The government, he
revival of economy has started arun jaitley -...
PTI January 14, 2015 7:39 IST

New Delhi: The government has managed to bring current account deficit within "comfort level" with help from falling oil prices, Finance Minister Arun Jaitley has said and added that economic revival has begun.

The government, he said on TUesday, is committed to fiscal discipline, boosting investment in infrastructure and reviving of manufacturing sector.

In a pre-Budget interaction with economists here, he said with a sharp decline in international oil prices and due to focused attention from the government, the current account deficit (CAD) is also within the comfort level.

"Global economic situation is facing a critical challenge and the present government is committed to regaining investors' confidence," an official statement quoted him as saying at the meeting.

Stating that the government has taken lots of initiatives in the last 7-8 months, he said overall, with growth improving and inflation and external fronts under control, macro-economy stability has improved.

The Finance Minister said the growth deceleration has bottom out and the revival has started.

The economy registered a higher growth in the first half of the current financial year at 5.5 per cent as compared to last year's 4.9 per cent in the first half, and 4.7 per cent in 2013-14.

Economists who attended the meeting included Errol D'Souza, IIM Ahmedabad, Rohini Somanathan, Delhi School of Economics, Chetan Ghate, ISI, Delhi and Sabyasachi Kar, Institute of Economic Growth.

During the meeting, economists in general expressed their optimism about growth of Indian economy and its capacity to realise its full potential in near future.

Focus will be given to domestic market and consumption as global economy is still not showing positive signs of growth except the USA, the statement said.

"Major suggestions include focus on boosting growth, containing inflation, rationalisation of subsidies, containing fiscal deficit and above all, bringing back the investors' confidence among others," it said.

The suggestions were received for larger public investment in agriculture, infrastructure sector including rural infrastructure among others, it added.

Besides this, suggestions were made for fiscal consolidation, change in structure of budget formulation including adoption of accrual accounting system in place of cash accounting and maintaining credibility of numbers, raising revenue resources through sales of spectrum, road map for subsidy rationalisation in areas of food, urea and kerosene etc.

It was suggested that a single window system be implemented both at Centre and States level for ease of doing business.

Some other suggestions included recapitalisation of banks, push in disinvestment to achieve targets, establishing institution for long-term fiscal policy and new fiscal framework.

Some suggestions received for tax reforms included widening tax base, making culture of tax compliance involuntary, not raising the threshold limit of income tax, and tax on agriculture income, setting-up more tax tribunals in a time bound manner.

Some suggestions received for tax reforms included widening tax base, making culture of tax compliance involuntary, not raising the threshold limit of income tax, and tax on agriculture income, setting-up more tax tribunals in a time bound manner.

Other suggestions included focus on revival of banking sector, setting up a committee of retired and experienced bankers to resolve cases of NPA, making MD and CEOs of PSBs accountable to Board of Directors of the bank.

 
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