Fin Min outlines measures for fiscal consolidation

Finance Minister Pranab Mukherjee today said that the government is taking a number of steps for fiscal consolidation to further strengthen and sustain economic growth.

In a written reply in the Lok Sabha, Mr. Mukherjee said the measures for fiscal consolidation include efforts to restrict the expenditure on central subsidies to under two percent of GDP in 2012-13 and to further bring it down to 1.75 percent of GDP in the next three years.

Government is also making a determined attempt to reduce the budgeted fiscal deficit to 5.1 percent of GDP in BE 2012-13 from 5.9 percent of GDP in RE 2011-12.

In addition, efforts are being made towards enactment of Direct Taxes Code, DTC and drafting of model legislation for Goods and Services Tax, GST.
Mr. Mukherjee said Standard and Poor's in its report did not downgrade India's credit rating.

He said S&P has affirmed India's BBB (negative) long-term and A-3 short term sovereign rating. However, it revised the outlook on the long-term ratings on India from Stable to negative.

The Finance Minister said the S&P should be viewed in the context of global economic conditions. He said since April 2011, several countries were downgraded by rating agencies, however India's sovereign rating have either been affirmed or upgraded in segments.

In a written reply in the Lok Sabha the Minister of State for Finance Namo Narain Meena said the government is committed to carry on the process of fiscal consolidation vigorously.

He said, the government may issue orders for strict compliance of the previous year's order for enforcing ten percent cut on budgetary allocations for holding seminars, workshops and conferences, ban on holding meetings and conferences at five star hotels.

The minister said, it also includes ban on purchase of vehicles except for the operational requirements of Defence Forces, Central Paramilitary Forces and security related organizations, restrictions on foreign travel and adhering to the quarterly ceilings under foreign travel expenses and ban on creation of plan and non plan posts etc.

MoS for Finance: Rupee depreciation due to supply-demand imbalance in market

The Minister of State for Finance Namo Narain Meena today saidthe main reasons for depreciation of rupee are due to supply-demand imbalance in the domestic foreign exchange market. In a written reply in the Lok Sabha, Mr. Meena said the imbalance is mainly due to widening of the Current Account Deficit, CAD, slow down in Foreign Institutional Investment inflows and heightened risk aversion due to the Euro Zone debt crisis.

The minister said to lower the impact of Gold imports on current account deficit under balance of payment, the government had proposed in the budget to increase basic custom duty on standard gold bars,gold coins of purity exceeding 99.5 per cent and platinum from two per cent to four per cent and on non-standard gold from five per cent to ten per cent.

The minister also said that, further the Reserve Bank of India has taken certain prudential measures in respect of Non-Banking Financing Companies predominantly engaged in lending against collateral of gold jewellery to restrict the loans against gold.Namo Narain Meena today saidthe main reasons for depreciation of rupee are due to supply-demand imbalance in the domestic foreign exchange market.

In a written reply in the Lok Sabha, Mr. Meena said the imbalance is mainly due to widening of the Current Account Deficit, CAD, slow down in Foreign Institutional Investment inflows and heightened risk aversion due to the Euro Zone debt crisis. The minister said to lower the impact of Gold imports on current account deficit under balance of payment, the government had proposed in the budget to increase basic custom duty on standard gold bars,gold coins of purity exceeding 99.5 per cent and platinum from two per cent to four per cent and on non-standard gold from five per cent to ten per cent.

The minister also said that, further the Reserve Bank of India has taken certain prudential measures in respect of Non-Banking Financing Companies predominantly engaged in lending against collateral of gold jewellery to restrict the loans against gold.