Govt’s financial position under control: Arun Jaitley2 min read . Updated: 22 Dec 2017, 07:57 AM IST
India's fiscal deficit is under control, and the govt will maintain a glide path for narrowing the gap between expenditure and revenue, says FM Arun Jaitley
New Delhi: Finance minister Arun Jaitley on Thursday said the government’s financial position was under control despite a blip in economic growth rate seen in the June quarter ahead of goods and services tax (GST) rollout in July.
The minister said fiscal deficit was under control and that the government will maintain its glide path for narrowing the gap between receipts and spending that is met through borrowing. Current account deficit, which narrowed in the September quarter to 1.2% of gross domestic product, too is under control, the minister told Lok Sabha while replying to a discussion on the second supplementary demand for grants for the current fiscal.
“It is our commitment to bring down fiscal deficit to 3.2% this financial year," Jaitley said, adding that a recovery taking place in global economic growth will benefit India as well.
“The (global economic growth) curve is moving up slowly, it is obvious that this upward movement is going to help several economies including India."
After a three-year low of 5.7% growth in the June quarter on account of production cuts by the industry while preparing for the new indirect tax regime, economic growth expanded at 6.3% in the September quarter. Economists believe effects of the disruption caused by GST rollout have already bottomed out.
The finance minister also assured the lower house of Parliament that the money of all depositors in public sector banks will be protected, despite the apprehensions regarding the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, introduced in the Lok Sabha in August this year.
The Bill seeks to limit the fallout of the failure of institutions like banks, insurance companies, non-banking financial companies, pension funds and stock exchanges but some of its provisions have been termed anti-people and anti-poor by the opposition parties.
“The government is committed to protecting every depositor in public sector banks and therefore we need not create any fear psychosis," the minister said. The Bill has a “bail-in" clause, which some experts say brings potential harm to deposits.
“What do we do with that clause (bail-in). The (joint Parliamentary) committee has wise people which will make some recommendations. We will consider that. We are open minded. We are very clear and the level of protection the government would want would be much higher than level which existed till today," he said. The committee is reviewing the Bill at present.
Earlier this week, the government sought Parliament’s approval for additional expenditure of Rs66,113 crore, which includes funds to roll out schemes for providing electricity connections to the poor and payment of urea subsidy. Of this, the proposals involving net cash outgo aggregates to Rs33,379 crore. The Lok Sabha approved Supplementary Demand for Grants on Thursday.