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“At the
G-20 meeting, we had already said that the world economy
is not yet out of the woods and that stimulus packages
will continue for some time to help the economy
recover,” said Mukherjee after a meeting with chief
commissioners of Customs, central excise and service
tax.
He further
said the government was ready to take improved measures
to combat drought, which has affected 272 districts in
the country.
“These
measures have significant financial implications. The
fiscal deficit is presently on the higher side and the
government is determined to revert to the path of fiscal
consolidation at the earliest,” he added.
Mukherjee
said though there was a 28 per cent decline in annual
indirect tax collections till July, the situation is
expected to improve in the fourth quarter of the current
financial year. The government has set a target of Rs
2.7 lakh crore for indirect tax collections during the
current year. He said this was the effect of pre- and
post-Budget fiscal incentives and slow international
trade. “This trend reflects the overall slowdown of the
economy and the effect of stimulus measures through
reduction of central excise duty rate. Despite such
limitations, the Central Board of Excise and Customs (CBEC)
will adopt innovative ways of meeting the revenue
shortfall,” Mukherjee said in his speech to CBEC
officials.
The
finance minister also discussed the introduction of the
proposed dual Goods and Services Tax (GST) by April 1,
2010. Mukherjee said he would discuss the progress in
introducing the tax with state finance ministers at a
meeting on September 16.
The
minister also said that while there was a gradual thaw
in the winter of economic crisis and the early green
shoots of economic recovery, the situation was still far
from normal. India’s exports to major traditional
markets in the developed economies has contracted in the
last 10 months.
To combat
the downturn in the economy, the government had
announced a slew of measures, including reduction in
indirect taxes, to put more money into the hands of
consumers, Mukherjee said. “In this year’s Budget, in
tune with the government’s commitment towards inclusive
growth, there have been larger financial outlays in
social sectors like health, education and for
improvement of rural and urban infrastructure. The
deficient monsoon has raised a spectre of drought in
large parts of India,” said the finance minister.
Mukherjee
said while central excise continued to be the bulwark of
indirect tax collection, service tax is the new sunrise
area for widening the tax base and improving revenue
collection. The role of Customs as revenue generator has
diminished, but its role in facilitation of
international trade continues to grow.
Source
: The
Business Standard, India, dated 09/09/2009
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