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GDP growth on higher trajectory, direct taxes robust: Finance Commission
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SME Times News Bureau | 17 May, 2019
The Finance Commission on Thursday said despite fluctuations, high GDP
growth has continued over the medium term and direct taxes have been
sound while there are some periodic ups and downs on the indirect tax
front.
The Commission made these observations during its meeting with the Finance Ministry.
"The
Commission observed that the GDP numbers have somewhat fluctuated
within the overall global trend which suggests continued high growth
trend over the medium term. The Commission also noted that the revenue
projections on the Direct Taxes are healthy though on Indirect Taxes,
there have been periodic fluctuations.
"On the expenditure
trend, there were discussions in regard to the rationalisation of the
Centrally Sponsored Schemes in sync with the new life cycle, they being
co-terminus with the Finance Commissions," the Finance Ministry said.
Detailed
discussions have continued over the last few months with the Finance
Ministry on the issues of the consequences of UDAY and the 7th Pay
Commission, particularly in the context of the finances of the states.
It presented before the Commission some preliminary views of the government on the Commission's Financial Terms of Reference.
The
economic development in the last five years were analysed in detail
with specific focus on growth, investments, industrial production,
banking and payments, inflation and monetary policy, the external
sector, and the medium-term outlook.
The Ministry made its
projections for 2018-19 and 2019-20 to the Commission, along with its
projections for the award period of the Commission (2020-21 to 2024-25).
The ministry also gave some accounts and overviews of the
receipt and expenditure forecast including a fiscal overview of the 14th
and the 15th Commissions, both as percentage of the GDP and of the GRR
(growth rate of return).
The Finance Commission also held
consultations with senior Ministry officials on the overall economic
situation and key economic variables, "credible to the ongoing work of
the Commission to reach an appropriate conclusion on both the vertical
and the horizontal devolution".
Apart from the Commission's
Chairman N.K. Singh and members Ajay Narayan Jha and Anoop Singh,
Finance Secretary Subhash Chandra Garg, Revenue Secretary Ajay Bhushan
Pandey, Expenditure Secretary Girish Chandra Murmu, Chief Economic
Adviser Krishnamurthy Subramanian, Central Board of Direct Taxes
Chairman P.C. Mody, Central Board of Excise and Customs Chairman P.K.
Das and other senior officials of the Ministry and the Commission were
present.
They also made a resource forecast which included tax
projections, and a comparative picture of tax growth and buoyancy. The
expenditure projections made by the Ministry included expenditure
classifications and requirements, the expenditure of the Central
Government during the 14th Finance Commission period and the expenditure
requirements during the award period of the present Commission.
The
Ministry and the Commission also had a detailed discussion on fiscal
management as well as on GST issues, local body grants and population
data.
The Commission is now awaiting the full Memorandum of the
Central government through Finance Ministry which is expected to be
delivered soon.
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