Finance Minister P Chidambaram on Monday said his ministry need not wait till the Budget to announce measures on the Parthasarathi Shome committee’s recommendations on retrospective amendments to the Income Tax Act.
The resolution of pending and anticipated tax disputes would be good for the country, the economy and investors, he said at the Economic Editors’ Conference here.
Chidambaram did not mince his words about the health of India’s economy. He said it was challenged and faced the risk of a severe slowdown in the absence of reforms. The sustained slowdown, he warned, would cast a shadow on job generation and income for a large part of the population.
“I consider that it is my duty to place before the people the truth. India’s economy is challenged,” he said, basing his assessment on the Centre’s fiscal and revenue deficits and India’s current account deficit.
As the recent FDI reforms drew flak from the Opposition, Chidambaram cautioned India's economy ran the risk of a sharp and continuing slowdown without such steps. “The controversy over FDI in retail is unnecessary and unjustified,” he said.
The minister said the government would come out with a plan for both the fiscal and revenue deficits for five years, starting from the current fiscal. Pointing out that a high fiscal deficit, along with supply-side constraints, had raised inflation, he said the RBI’s monetary stance and the Centre's fiscal policies must be aligned.
He exuded confidence of meeting the Budget estimates of tax collection (Rs 7.71 lakh crore), disinvestment (Rs 30,000 crore) and realisation from the sale of telecom spectrum (Rs 40,000 crore).
This month, the Cabinet is likely to take up a disinvestment plan for the remaining five months of the current fiscal.