FM says on track to meet fiscal consolidation road map

The government has set the target of achieving 4.5% fiscal deficit by FY26.
Union Finance Minister Nirmala Sitharaman presents the Interim Budget 2024 in the Lok Sabha, at Parliament House in New Delhi, Thursday, Feb. 1, 2024.
Union Finance Minister Nirmala Sitharaman presents the Interim Budget 2024 in the Lok Sabha, at Parliament House in New Delhi, Thursday, Feb. 1, 2024.| PTI

NEW DELHI: Finance minister Nirmala Sitharman on Thursday said the government is not only aligning with the fiscal consolidation but also bettering it.

The FM was responding to media queries during post-budget press briefing. “Not only aligning with the fiscal consolidation road map that we gave earlier but bettering it,” she said while adding that it is the simple, straight forward message to rating agencies, who had said that they would consider revising India’s rating after budget.

The government has set the target of achieving 4.5% fiscal deficit by FY26. The finance minister in her Budget speech said that the government will bring down the fiscal deficit to 5.1% in FY25.

Giving the details of Rs 1 lakh crore budget allocation for 50-year interest free loans for research and innovation, expenditure secretary TV Somanathan said: “This will be provided to a financial institution to be identified, which will then finance or refinance projects at long tenors and at concessional rates of interest. Money has been provided in the budget to the Department of Economic Affairs (DEA) for multiple purposes including this one, so there is a provision for this in DEA, which covers many other things.”

“As announced in the budget speech, these are the sunrise sectors…. clear identification of those sectors will be through a stakeholder process,” said Ajay Seth, Economic Affairs Secretary.

With regard to the launch of the new housing scheme, Somanathan said the interest subvention could be one of the features of this scheme but nothing has been finalised. “It is under discussion between the Department of Financial Services and the Housing and Urban Affairs Ministry. Multiple options are being considered on how to achieve the purpose that has been set out,” he said.

On the question of waiving off petty tax demands, revenue Secretary Sanjay Malhotra said there are a small number of demands which are pending with respect to income tax, wealth tax and gift tax. “The number in all is about 2.68 crore (of) such demands. The total demand is very high at Rs 35 lakh crore, a lot of it is in litigation. But many of these demands -- about 2.1 crore out of 2.68 crore -- are valued less than Rs 25,000,” said that revenue secretary.

He further said many of these demands are very old, dating from 1962 when income tax act was enacted.

On the India-Middle East-Europe Economic Corridor, the finance minister said, “It’s been announced and we are taking it forward. Yes, there is a significant disturbance in the Red Sea area and the Middle East. But this is a project that has long-term implications for the entire region, up to Europe, because it also includes Europe. So, yes, we will be taking this project forward. We will be consulting and taking it in all its contours.”

Small number of tax demands pending

On the question on waiving off petty tax demands, revenue Secretary Sanjay Malhotra said that there are a small number of demands which are pending with respect to income tax, wealth tax and gift tax. In addition, with regard to the launch of the new housing scheme, Somanathan said that the interest subvention could be one of the features of this scheme but nothing has been finalized.

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