Union finance minister P Chidambaram will most likely read out a short four-page Budget speech, but present the comprehensive Direct Tax Code (DTC) Bill while tabling a vote-on-account for 2014-15 in Parliament next month.
The DTC aims to consolidate all direct tax legislation and will eventually replace the Income Tax Act, 1961.“The DTC is ready. It is my intention to ask the Cabinet for approval to introduce the Bill and leave it as part of Parliament's record,” Chidambaram said in an interview to The Indian Express on Sunday. He, however, said none expected it to be passed in the session.
As far as the Goods and Service Tax was concerned, the finance minister said the ball was in the court of the empowered committee of state finance ministers. “They have been backtracking on many decisions taken in earlier meetings. Therefore, unless they firm up their position, it will be difficult to finalise the GST Constitution Amendment Bill. It was my hope, it is still my hope to at least introduce the GST Amendment Bill, but I await the final stance of the state finance ministers,” Chidambaram said.
While sticking to the Budget target of fiscal deficit for 2013-14, the finance minister is likely to project a 6% plus growth rate for the next financial year.
“The Prime Minister has fully supported me on that matter. So I can confidently assert three weeks before the Budget will be presented that we will not breach the 4.8% target for fiscal deficit set for the current fiscal,” he said.
When asked if India had missed the investment bus after the 2008 global economic crisis during its second term (2009-14), Chidambaram pointed out that investment had slowed down in 150 other countries. He, however, admitted that it was partly “our own making”.
The government allowed fiscal deficit limits to be breached and also allowed inflation to be entrenched at a very high level. “But those were unintended consequences. Let me repeat, those were unintended consequences of the stimulus packages which everybody in this country at that time agreed was a right medicine for the crisis that we faced,” Chidambaram said.
This led to a sharp slowdown in the economy, the first casualty being investment, the finance minister said.
“But in the last 17 months, we have taken a number of corrective steps. Clearly, the prospects are India will get into 6 per cent plus growth rate in 2014-15. The latest projections by World Bank are India will grow 6.2% next year,” he said.