<p>“The country has the resilience and capability to face any situation arising out of a drought-like situation. There is no need to press the panic button,” he said at an interactive session organised by the Federation of Indian Chambers of Commerce and Industry here.<br /><br />Although a deficient rainfall of 26 per cent this year is likely to result in a 15-20 per cent shortfall in kharif production, with 252 districts in 10 states being declared drought-affected, the government was seized of the problem and would tackle the situation through its buffer stock and strategic reserves of food grain, he said.<br /><br />Regarding the growth prospect, Mukherjee said: “I have reasons to be hopeful that a growth of 6 per cent plus is possible in 2009-2010, despite the impact of drought.”<br />Making a fervent appeal to desist from panicking over drought, he said “in view of the revival of confidence among corporates and an improvement in the international economic situation, a return to a 8 per cent growth rate is within the realm of possibility in the medium term”.<br /><br />Direct Tax Code<br /><br />Responding to queries on the proposed new Direct Tax Code (DTC), which proposes to replace the Income Tax Act, 1961, Mukherjee sought to allay the apprehensions of the industry over the perceived adverse effects of DTC. “The rates of taxation set out in the code were illustrative and not actual. The actual rates will be determined and have to be ratified by Parliament,” he said. “The illustrative rates have been given out for information and informed discussion, and the Direct Tax Code Bill will be introduced in Parliament in the winter session after receiving input from stakeholders for implementation from 2011,” Mukherjee said.<br /><br />In response to the industry concerns over the implementation of the proposed Goods and Service Tax (GST) on the targeted date of April 1, 2010, the finance minister said, “We are trying to arrive at a consensus at the level of the states, some of which are governed by the Opposition parties, so that the consensus at the national level on GST percolates to the states and we are able to stick to the April 2010 date.”<br /><br />“As of now, we are trying to quickly expand the areas of convergence and narrow down the areas of divergence,” he pointed out.<br /><br />On concerns over the growing fiscal deficit, Mukherjee said, “We have to move fast on reducing the fiscal deficit to 4 per cent from the present level of 6.8 per cent.”<br />Admitting that high levels of fiscal and revenue deficits were not sustainable, he said the fiscal deficit was going up because of an increase in public spending to spur demand in the economy.<br /><br />“We have tried to generate rural demand and enhance rural income so that the benefit of renewed demand could be cashed in on by the manufacturing sector,” the minister said.<br /></p>
<p>“The country has the resilience and capability to face any situation arising out of a drought-like situation. There is no need to press the panic button,” he said at an interactive session organised by the Federation of Indian Chambers of Commerce and Industry here.<br /><br />Although a deficient rainfall of 26 per cent this year is likely to result in a 15-20 per cent shortfall in kharif production, with 252 districts in 10 states being declared drought-affected, the government was seized of the problem and would tackle the situation through its buffer stock and strategic reserves of food grain, he said.<br /><br />Regarding the growth prospect, Mukherjee said: “I have reasons to be hopeful that a growth of 6 per cent plus is possible in 2009-2010, despite the impact of drought.”<br />Making a fervent appeal to desist from panicking over drought, he said “in view of the revival of confidence among corporates and an improvement in the international economic situation, a return to a 8 per cent growth rate is within the realm of possibility in the medium term”.<br /><br />Direct Tax Code<br /><br />Responding to queries on the proposed new Direct Tax Code (DTC), which proposes to replace the Income Tax Act, 1961, Mukherjee sought to allay the apprehensions of the industry over the perceived adverse effects of DTC. “The rates of taxation set out in the code were illustrative and not actual. The actual rates will be determined and have to be ratified by Parliament,” he said. “The illustrative rates have been given out for information and informed discussion, and the Direct Tax Code Bill will be introduced in Parliament in the winter session after receiving input from stakeholders for implementation from 2011,” Mukherjee said.<br /><br />In response to the industry concerns over the implementation of the proposed Goods and Service Tax (GST) on the targeted date of April 1, 2010, the finance minister said, “We are trying to arrive at a consensus at the level of the states, some of which are governed by the Opposition parties, so that the consensus at the national level on GST percolates to the states and we are able to stick to the April 2010 date.”<br /><br />“As of now, we are trying to quickly expand the areas of convergence and narrow down the areas of divergence,” he pointed out.<br /><br />On concerns over the growing fiscal deficit, Mukherjee said, “We have to move fast on reducing the fiscal deficit to 4 per cent from the present level of 6.8 per cent.”<br />Admitting that high levels of fiscal and revenue deficits were not sustainable, he said the fiscal deficit was going up because of an increase in public spending to spur demand in the economy.<br /><br />“We have tried to generate rural demand and enhance rural income so that the benefit of renewed demand could be cashed in on by the manufacturing sector,” the minister said.<br /></p>
