Echoing Prime Minister Narendra Modi's talk of tough decisions in the coming budget, Finance Minister Arun Jaitley on Tuesday said time has come to take measures that will put the country on a faster pace of growth and restore investor confidence.
“With regard to the finance ministry, this is a challenging time for it and it is challenging because in the last two years, the economy has moved at a slow pace. Whatever steps have to be taken in this direction, this is the time for it and you will have to wait for this,” said Jaitley.
Although the minister did not elaborate on the steps his government might take to re-ignite the economy in coming days, experts said the government might go for some rationalisation in food and fertilizer subsidies. It could also scrap some unproductive schemes such as centrally-sponsored ones and a major revamp in NREGA to make it pro-growth.
Sources in finance ministry said that fiscal consolidation goals do not give much leeway to the government for any major relief on Income tax front. However, there could be some rejig in tax slabs or exemption rates to take care of inflation.
“To make the economy grow at a faster pace and reinstate the trust of investors in it, I have held consultations with stakeholders for the last three-four weeks,” Jaitley said.
The finance minister will present his maiden Budget next month at a time when the country is facing near stagflation – a condition depicted by of slow economic growth and high inflation.
Indications of a sub-normal monsoon and the conflict in oil-producing Iraq may add to the government's woes.
Earlier this month, the prime minister too had said he would administer "bitter medicine" to revive the economy.
Soon after that, the government announced a steep hike in rail passenger fares and freight charges.
