Laid foundation for USD 5 trn economy in budget: FMFebruary 10, 2020 09:47
Finance Minister Nirmala Sitharaman on Sunday said that the foundation for achieving the goal of $5 trillion economy by 2024-25 has been laid in the union budget which stressed on increasing capital expenditure for infrastructure.
She said that the budget has also focused on increasing consumption and investments towards building assets.
"I think we have laid the foundation for increasing consumption and investments towards building assets such as infrastructure, which should have a cascading effect in the long and short term," Sitharaman told reporters in Kolkata.
She said this will trigger the virtuous cycle for the economy to perform and move forward.
"The majority of government investment is directed towards creating infrastructure and through various windows like health and agriculture to avoid any kind of rural distress. These will create the foundation for the $5
trillion economy," she said.
Asked about rationalisation of rates of Goods and Services Tax, the finance minister said that it is being reviewed every three months by the GST Council.
"If the rates are reviewed every three months, the government cannot make an assessment of revenue collection. Can we consider a situation where rate rationalisation is done once a year and not every three months?. I have proposed the GST Council to consider it," she said.
Rationalisation of GST rates once a year will help the government and businesses, she said.
"It is not that GST collection is not happening. The indirect tax administration is now getting the benefits of data analytics to prevent fraudulent activities," the finance minister said.
The GST collection has been around Rs 1 lakh crore per month, she said.
To a query whether GST has been revenue neutral as was envisaged, the finance minister said, "The compensation rate (for states' revenue loss) was fixed at 14 per cent on the basis of certain level of calculation. However, collections have fallen (short of expectations) and so there will be an impact."
The compensation rate was fixed on the premise that the economy will grow by 12-13 per cent, she said. -- PTI