Vishav and Manish Gupta | 05 Feb, 2018
The Finance Ministry is confident of meeting next year's fiscal
deficit target of 3.3 per cent, citing lesser uncertainties ahead,
even as it failed to achieve its target for 2017-18.
this year's upward revision of fiscal deficit target to 3.5 per cent
from 3.2 per cent a "one-off aberration", Economic Affairs
Secretary Subhash Chandra Garg said the economy is well on its path
of fiscal consolidation despite a "small pause of a
"Next year, we've planned for 3.3 per
cent. And since there would be lesser number of uncertainties next
year, we believe that 3.3 per cent is very credible," Garg told
IANS in an interview.
"To further improve the
credibility of it, we have now proposed an amendment in the Fiscal
Responsibility and Budget Management Act to statutorily bind the
government to pin down fiscal deficit to three per cent by 2021. We
actually hope to do it much sooner," he added.
said various factors, including the implementation of the Goods and
Services Tax and shortfall in the non-tax revenue, led to a wider
fiscal deficit in the current year -- factors which, he said, won't
be there next year.
He said while the government received
better proceeds in some areas like direct tax collections and
disinvestment, overall it fell short by around Rs 50,000 crore (over
"That's the reason we have a fiscal
deficit of 3.5 per cent."
The Secretary said the
economy was virtually in the last leg of fiscal consolidation and
that concerns about fiscal deficit were "certainly
"Although not every quarter has that
concern, most people believe that it's very strong fiscal
consolidation, unparalleled of the government's undertaking this kind
of fiscal consolidation in the world. But there are some sections
which still have some reservations. To them I say that this concern
is quite overblown."
There have been concerns on the
job front as well from various quarters, with many experts pointing
out the wider fiscal deficit would have been acceptable if there was
higher public spending towards job creation, which is not the
Garg dismissed those concerns and said calculating
job creation is a difficult thing because there are numerous ways of
job creation, both direct and indirect.
is not just what happens within the government, but also through the
measures the government takes through different programmes."
are some direct ways like National Rural Employment Guarantee Scheme
and there are some programmes like ASHA and mid-day meal scheme which
generate employment for villagers.
"Then there are
numerous programmes that create jobs indirectly... By government
investment programmes in infrastructure like rural roads of Rs 90,000
crore and Awas Yojana of Rs 30,000 crore -- these are also ways of
job creation," he said.
Garg added the third
important way of job creation is by creating an enabling environment
for the private sector, within which the biggest chunk is created by
the so-called informal sector and the small and medium
Here the job creation per crore of rupees is
much higher than in capital intensive industries, he said.
government has encouraged job creation in the private sector through
Mudra Programme giving out loans to crores of people, the textile
package, by reducing tax on MSMEs with a turnover up to Rs 250 crore
and other ways of incentivising the private sector to employ more
people like the government sharing the burden of provident fund,"