The government might miss the April 1 deadline for
rolling out the much-anticipated goods and services tax
(GST), Finance Minister Pranab Mukherjee indicated
today.
“The empowered committee of state finance ministers,
headed by West Bengal Finance Minister Asim Dasgupta, is
trying hard to bring about a consensus among the
states…we are working together, but it may not be
possible to roll out GST from April 1, 2010. But I am
quite sure, it will be possible for us to introduce GST
at an appropriate time,” Mukherjee said at the
Industrial India Trade Fair, organised by the Bengal
National Chamber of Commerce and Industry and the West
Bengal government.
The finance minister mentioned GST in the context of the
need to expand revenue sources to bring down the fiscal
deficit.
He said fiscal consolidation was one of the major
concerns before the government. “We cannot live with
this high fiscal deficit. The Centre and states have to
ensure that it (fiscal deficit) comes down and the
answer lies in expanding revenue sources. We have to
rationalise subsidy and enhance the revenue base,” said
Mukherjee.
On fertiliser subsidy, he said: “I am in touch with the
Ministry of Fertilisers on how to rationalise it, so
that the subsidy reaches directly to the farmers.”
The government has set a target to bring down the fiscal
deficit to 5.5 per cent of the gross domestic product
(GDP) by 2010-11 and to 4 per cent by 2011-12 from the
current level of 6.8 per cent.
Mukherjee also said that the government was in no hurry
to withdraw the fiscal stimulus. “The stimulus packages
were injected to boost the economy. Unless full recovery
is possible and when the planners are able to make an
assessment that it is time to withdraw, only then the
stimulus will be withdrawn,” he said.
However, the finance minister has taken an “optimistic”
approach to project 7.5 per cent growth for the economy
in 2009-10 exceeding last year’s 6.7 per cent.
“The Reserve Bank of India (RBI) had projected 6 per
cent growth and the Prime Minister’s Economic Advisory
Council projected 6-6.5 per cent growth, but I have
taken an optimistic approach,” Mukherjee said.
The basis of his optimism was the industrial growth. The
finance minister said in the third quarter even if the
agricultural growth turns negative because of adverse
impact of the monsoon in some parts of the country, it
would be adequately compensated by the industrial
growth. In the second quarter, the contribution of
agriculture was 0.91 per cent.
