Finance Minister Arun Jaitley promised “appropriate actions” at the “right time” to revive the slowdown-hit economy and said the government is seized of the problem of private investment not picking up.
Jaitley, who has been holding consultations with his Cabinet colleagues and senior government officials to devise plans to lift the economic growth, said real estate can be brought under the just-introduced Goods and Services Tax.
“From Day one, this is a proactive Government. We are analyzing the economic indicators and appropriate action will be taken at right time,” the Finance Ministry tweeted Jaitley as saying at an investor meeting.
Acknowledging that there is a problem of private investment not picking up, Jaitley said the government is seized of the issue. “Very soon you will hear from us”.
Two years ago, India was touted as a rare bright spot in a gloomy global economy with the GDP growth outpacing a slowing China. But since early 2016, the growth has fallen for six consecutive quarters, hitting a three-year low of 5.7 percent in the April-June quarter with India losing the fastest growing economy tag to China for the second straight quarter.
Besides falling GDP growth rate, exports are facing strong headwinds and the industrial growth is the lowest in five years. The current account deficit (CAD) – the difference between inflow and outflow of foreign exchange, has risen to 2.4 percent of GDP in April-June.
The government has no reservations in privatizing state-owned firms but has to wait for the right time before divesting stake in PSUs, Jaitley said, adding that the disinvestment target for the current year is “ambitious”.
For current fiscal, the government has budgeted to raise Rs 72,500 crore through stake sale in PSUs. This compared to over Rs 46,000 crore raised in last fiscal.
Jaitley said in the last few years India’s confidence as a nation has increased tremendously and the present government has taken quick decisions whether it is implementing GST or targeting of subsidies.
Indirect tax reform Goods and Services Tax (GST) was implemented from July 1. It has subsumed over a dozen taxes and transformed India into a single market with uniform tax rates.
Jaitley said that the government has been able to contain the inflationary impact post GST.
“As far as bringing more items under GST is concerned, I think real estate is the most easy to bring in,” he said.
As far as black money and benami transactions are concerned, Jaitley said it is no more safe in India to deal in excessive cash