Budget provisions were not made keeping the US tariffs in mind, finance minister Nirmala Sitharaman said on Monday. While speaking to media in Rajya Sabha premises, the finance minister said the budget changes in the customs duty is part of a larger plan to make the import duty framework simpler.
She said the ministry has not made an assessment of the US tariff impact on all sectors, and if steps taken in the budget benefitted some US tariff-hit sectors, it was only incidental. “The larger goal was to help labour-intensive sectors like textile and leather,” said the finance minister.
The minister in her budget speech had said that her proposals for customs and central excise aim to further simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct inversion in duty.
“US tariff has impacted our budget proposals. For the last two year, every budget we made changes in the customs duty structure,” she reiterated.
The budget has proposed a series of changes to customs duty that aim to lower input costs for manufacturing and exports, while tightening tax rules in selected areas. Customs duty on all dutiable goods brought in for personal consumption has been cut to 10% from 20%. It has proposed removal of basic customs duty on 17 cancer medicines and expanded duty exemptions for drugs used to treat rare diseases. A series of exemptions targets manufacturing and energy security.
The US government tariff of 50% on imports of Indian goods has impacted many sectors including textile, leather, gems & jewellery.
On the question of shifting the to Debt/GDP ratio from fiscal deficit, the finance minister said that though the government will be tracking debt/GDP as an indicator for fiscal management, it will not overlook the fiscal deficit parameter.
Sitharaman said the fiscal deficit target has to depend on each year's economic situation and in the past the government has pegged the fiscal deficit a couple of basis points lower than the previous fiscal year. This fiscal year with "government's priority being growth, I am comfortable with the 4.3% deficit target. We will see how it goes,” she said.