FM Arun Jaitley: Steps for subsidy reform soon

Aug 31 2014, 00:58 IST
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Union finance minister Arun Jaitley with MoS Nirmala Sitharaman addressing the media, in New Delhi on Saturday. (PTI) Union finance minister Arun Jaitley with MoS Nirmala Sitharaman addressing the media, in New Delhi on Saturday. (PTI)
SummarySays fiscal deficit target of 4.1% ‘certainly achievable’

Heartened by the latest economic data that showed the country’s gross domestic product (GDP) expanded at the fastest rate of 5.7% since the last quarter of FY12 in April-June this year, finance minister Arun Jaitley said on Saturday he was now more confident of meeting the fiscal deficit target of 4.1% of GDP for FY15 than when the Budget for the year was made. He said the Expenditure Management Commission headed by Bimal Jalan would give a report on subsidy rationalisation ‘expeditiously’ so that a good beginning can be made in the current year.

Addressing the media, the minister termed the Supreme Court’s decision of declaring all 218 captive coal block allocations between 1993 and 2010 as illegal and arbitrary as a ‘silver lining’. He said it would lead to fairer methods for allocations of natural resources, but stressed that “we can’t allow the fate of these blocks to hang in mid-air”.

These blocks, he asserted, would need to be utilised for the purpose they had been allocated, which is power generation. While the court is slated to pronounce whether and how these blocks would be de-allocated/re-allocated, the government had earlier made it clear that if these are de-allocated, alternative means of coal supply to power producer would be explored.

Listing out steps taken by the Narendra Modi government to regain investor confidence, the “long-term impact of which would be felt gradually”, Jaitley said he saw a ‘positive attitude’ by some main opposition parties towards the insurance bill, which seeks to raise the foreign investment cap in the capital-starved sector to 49%. He added that he was ‘reasonably confident’ that the bill, now being vetted by a select committee, could be passed in the winter session of Parliament.

Earlier, finance secretary Arvind Mayaram, said the recent data did point to revival of growth. He expressed the hope that an ambitious disinvestment agenda for the year could yield even higher revenues than budgeted. As per the FY15 budget, the government expects to garner proceeds of R43,425 crore from stake sales in 11 state-owned companies, and at least R15,000 crore from sale of residual stake in Hindustan Zinc and Balco, both private firms. As reported by FE earlier, the disinvestment department’s internal estimates suggest that the combined target of R58,425 crore could be outstripped by about R13,000-15,000 crore.

Jaitley

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