The center is said not to resort to any sort of expenditure cut in the wake of 1.45 lakh crores corporate tax relief that was unveiled last week, said Sitharaman.
The Finance Minister also mentioned that there was no plan to raise the fiscal deficit target for the current fiscal following the corporate tax rate cut.
The center is said to not resort to any expenditure cut in the wake of the massive 1.45 lac crores Corporate Tax Relief that was unveiled last week, finance minister Nirmala Sitharaman said on Sunday and added that the finance ministry was asking departments to step up spending.
Worries over the fiscal deficit target for the current fiscal year were being breached and had surfaced the following massive corporate tax rate cut and some experts had said that the government might be forced to undertake spending cuts to meet its fiscal deficit target of 3.3 % of GDP.
During an interview with reporters in her office, Sitharaman said that she had asked expenditure secretary G C Murmu to meet heads of other departments and state-run companies and ask them to front-load spending. “He has already held some meetings and we are saying please spend”, saidSitharaman also confirming that the government was not altering any of the targets as of now.
The Minister also commented on the fact that there was no plan to raise the fiscal deficit target for the current fiscal following the corporate tax rate cut. Her comments put at rest concerns that the government may be forced to curb spending after the tax rate cut.
Economics even commented that the sluggish revenue position and the revenue foregone due to the corporate tax rate cut would widen the deficit closer to 4% while some others have declared that it could be near to 4.1%. The government is although faced with a tight revenue position, GST positions also remained sluggish. Some experts have even called for the relaxation of the fiscal deficit targets in order to counter the force full impact of the slowdown.
Reports say that the government has so far been cautious and has signaled its commitment to fiscal consolidation. The government has set up the fiscal deficit target at 3.3 % of GDP, which is marginally lower than the 3.4% of GDP in the previous year. The high spending of government has become a major booster for some sectors due to the absence of private investment. The Modi government has advanced the budget to February two front-load spending and cut-out delays in rolling out expenditure plans in different ministries and departments.