Jaitley should contain fiscal deficit in Budget 2018: Noted economist

Budget 2018

Finance Minister Arun Jaitley should try to achieve the fiscal deficit target and take more steps to implement projects efficiently in the forthcoming Budget, noted US-based economist T N Srinivasan has suggested.

Srinivasan, the Samuel C Park Jr Professor Emeritus of Economics at Yale University, further said there is no economic theory to link job losses to demonetisation and implementation of the Goods and Services Tax (GST).

"I expect him to contain the fiscal deficit as far as he can, take further steps to implement projects efficiently and on time," he told PTI.

The government is aiming to contain fiscal deficit for the current fiscal at 3.2 per cent of GDP.

Jaitley is scheduled to present the Union Budget for 2018-19 on February 1.

Asked to comment on concerns in India about job losses due to demonetisation and GST rollout, Srinivasan, who at one point taught RBI Governor Urjit Patel, said, "There is no economic theory linking the two.

To further ease the insolvency and bankruptcy process and streamline the acquisition of stressed assets, Union Finance Minister Arun Jaitley may do away with no-objection certificates required for asset transfers.This comes under Section 281 of the Income-Tax Act, and it will be waived for transactions between companies under insolvency and those buying their assets.Apart from this, the Budget may also get rid of stamp duties on transfers of stressed assets. The Central Board of Direct Taxes (CBDT) has said that the minimum alternate tax will not be applicable to firms undergoing insolvency proceedings. Besides, the finance minister’s speech is also likely to dwell on three biggest "disruptive" reforms carried out in recent times, demonetisation, the goods and services tax, and insolvency proceedings. Sources say Jaitley will present a report card of all three measures and may reveal new details, apart from the data out in the public domain.Section 281 of the Income Tax Act, 1961, requires an assessee to obtain the permission of the assessing officer before creating a charge on or transfer of certain assets, including land, building, machinery, manufacturing facilities, and others.

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