New Delhi: Finance minister Arun Jaitley said on Tuesday that the stress in sectors like telecom, civil aviation and real estate is affecting revenue collections.
The minister said that the challenge in meeting the stiff goods and services tax (GST) collection target was mostly from services sector rather than the manufacturing industry. Excessive competition has led to decline in tariffs affecting GST collections from the telecom and airline industries, the minister said in an interview broadcast on Tuesday night by the All India Radio.
The other areas which are a matter of concern are the sluggish real estate industry and stagnant auto sales, the minister said. The stress in individual industries are problem for policymakers as any large businesses going bankrupt could impact the health of banks. The stress in the telecom sector has a direct impact on government’s ability to raise funds by auctioning spectrum.
Jaitley said income tax collections, on the other hand, is robust. The income tax department collected ₹ 6.75 trillion in direct taxes this year up to November, accounting for close to half of its FY19 target of ₹ 11.5 trillion. The April-November gross direct tax receipts show a 15.7% jump in revenue compared to the same time a year ago.
Jaitley declined to say whether the National Democratic Alliance (NDA) will announce a national farm debt waiver, but said if a state government wants to announce one, it could go ahead. The minister also said that states announcing farm loan waivers should make sure that banks are re-paid so that the credit cycle doesn’t break. If it does, lenders will not be in a position to lend in the next season, he said.
Arun Jaitley also said, in response to a question, that the Reserve Bank of India was unquestionably independent. The government has only flagged the issue of liquidity and credit availability to the central bank. The government of the day which is an accountable institution should flag these to the central bank, he said. Earlier this month, the RBI witnessed a change of guard at its top when governor Urjit Patel left abruptly citing personal reasons after a bruising stand-off with the government on issues like regulation of weak banks and RBI’s autonomy.