FINANCE Minister Jaitley Says Government Will Spend 100 Percent of The Budgeted Capital Expenditure By March 2019

DESPITE  skyrocketing  prices of  petroleum  fuels and  falling  of Indian Rupee against  US Dollars , Finance Minister Arun Jaitley says “we  will stick to the fiscal deficit target of 3.3 per cent this fiscal as it expects buoyant tax revenues and exceeding disinvestment target”. After  reviewing the economic  scenario with Prime Minister Narendra Modi and topmost officers  on Saturday in Delhi, Jaitley said  there is nothing  to  worry  about  Indian economy while  ducking query  about  rising  petrol and  diesel prices.  The government on Saturday reaffirmed its intent to walk the talk on fiscal discipline, amid heightened optimism that the economy is poised to move into a faster lane, but steered clear of committing any measures to contain fuel prices despite growing public pressure. PM Modi takes stock of economy .The finance minister said the government will spend 100 percent of the budgeted capital expenditure by March 2019.“The government is confident that it will strictly maintain a 3.3 percent fiscal deficit for 2018-19 ,” said the Finance Minister , who was  speaking  to reporters after a three-hour Prime Minister Narendra Modi chaired meeting to take stock of the economy.“Capital expenditure has already reached 44 percent of the budgeted expenditure,” Jaitley said. The finance minister said the government will spend 100 percent of the budgeted capital expenditure by March 2019.Capital expenditure, as opposed to revenue expenditure, is viewed as more productive with strong multiplier effects as it involves money spent on acquisition of assets such as land, buildings, machinery and equipment. Capital expenditure, as opposed to revenue expenditure, is viewed as more productive with strong multiplier effects as it involves money spent on acquisition of assets such as land, buildings, machinery and equipment. Speaking to reporters after Prime Minister Narendra Modi reviewed various departments of the finance ministry, he said the government is confident of surpassing the 7.2-7.5 per cent GDP growth rate projected in the Budget for 2018-19.”We will stick to fiscal deficit target,” he said, adding that the capital expenditure targets will also be met. Jaitley said the income tax collections have been robust with expanding base and collections will exceed budgetary targets. The Goods and Services Tax (GST), he said, is settling down. He also exuded confidence of surpassing the Rs 1 lakh crore target from disinvestment proceeds. On Friday, the government announced a five-point strategy to arrest the rupee’s slide, after a late evening meeting that the prime minister took with Jaitley and Reserve Bank of India (RBI) Governor Urjit Patel, among others.The measures include removal of withholding tax on Masala bonds, relaxation for foreign portfolio investors and curbs on non-essential imports to contain the widening current account deficit (CAD), which has widened to 2.4 percent of GDP in April-June, and check the rupee’s fall. These measures are likely to have a positive impact to the tune of $8-10 billion, a top finance ministry official said. Despite robust GDP growth and falling inflation, India is facing the threat of a widening twin deficit—current account and fiscal deficit—led by a clamour for an excise duty cut on fuel as falling value of rupee against dollar has made petrol diesel more expensive for the common man. Weakening domestic currency against dollar has hardened benchmark bond yields that have surged their highest in four years, apart from escalating import bill and depleting forex reserves (with inputs  from Moneycontrol.com ).

 

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