Economic affairs secretary Arvind Mayaram is confident that the fiscal targets set by finance minister P Chidambaram are achievable. In an interview with FE?s Arup Roychoudhury, he said that the government pulled through with most targets for FY14 despite of a difficult economic situation.
We have experienced the slowest growth rate in a decade. There is also a fear of further emerging market shocks due to additional US fed tapering going into next year. So is the growth target too ambitious?
A real GDP growth rate of 6% for FY15 is achievable. We must remember that for the last two quarters of the current financial year, our growth rate will be around 5.2%. So if you go further, we do expect growth to be around 5.8% in the first two quarters of FY15.
Going ahead, if the trend is the same, it?s 6.2% for the last two quarters of FY15. So 6% can be achieved.
The finance minister gave a fiscal deficit target of 4.1% of gross domestic product for FY15. But given the additional expected subsidy burden of the food security programme and any probable tax revenue shortfall, can that target be achieved?
We have achieved a fiscal deficit of 4.6% (of GDP) this year, instead of our target of 4.8%. The conditions were no different this year. For FY15, we can achieve 4.1%
The FM has said that the manufacturing sector is the ?Achilles heel? of our economy. He has also cut indirect taxes in key sectors. While the industry has hailed the move, there is a suggestion that this realisation is maybe a little too late. Your thoughts?
It is never too late. Are you suggesting that the industry does not like it happening now? The question is that there is a time when you take these decisions. These are not easy decisions, so therefore you need to analyse and when the right time comes you take them. I mean if we had taken these decisions six months ago, you could still have asked that why were these decisions not taken a year ago.
