“The government is constantly reviewing the economic situation to decide until when the stimulus measures need to be continued. Right now it is not desirable to plan the exit strategy of stimulus packages now,” Finance Minister Pranab Mukherjee said on the sidelines of the annual conference of Chief Commissioners of Central Excise, Customs and Service Tax here on Tuesday.
“This is no time to think till how long we should continue with the stimulus packages. The need of the hour is to spur demand in the economy.
Tax revenue
The packages aim at that,” he said. He pointed out that finance minsters at the recently held G-20 meeting also expressed similar opinion, despite signs of recovery in the global economy. They are understood to have recommended for continuation of stimulus until the recovery was well entrenched.
Answering a query about likely shortfall in revenue collections on the indirect tax front, he said the shortfall could be due to several tax cuts provided in the budget, adding “but we hope to meet annual indirect tax targets for 2009-10.” Further, Mukherjee ruled out possibilities of further tax cuts to boost demand in the economy.
Earlier while addressing the top revenue officials of the Central Excise and Customs, Mukhjeree noted that it was a matter of concern that indirect tax receipts during 2009-10 (up to July, this year) had shown a negative growth of 28 per cent as compared to last year. “No doubt, this trend reflects the overall slowdown of the economy and the effect of stimulus measures through reduction of Central Excise duty rate.
But my expectation is that despite such limitations, the Central Board of Excise and Customs would adopt innovative and dynamic ways of meeting the revenue shortfall,” he said.
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