Finance minister P Chidambaram said on Friday that targets set in the FRBM Act for 2006-07 will be met. The overall revenue and expenditure progress achieved till now shows that fiscal deficit would be lower than the budget estimate, he indicated while chairing a meeting of the Parliamentary consultative committee attached to the finance ministry. FRBM targets envisage elimination of revenue deficit and reduction of fiscal deficit to 3% of GDP by 2008-09.
The meeting was convened to consider suggestions for the 2007 budget. According to a press statement issued by the ministry, most members of the committee emphasised the need for a greater thrust on the agricultural sector. The committee called for greater investment, lower interest rates and a reduction of taxes to make inputs cheaper for the agricultural sector.
The committee was of the view that some sort of cieling for the fringe benefit tax (FBT) be introduced. Other suggestions include abolition of central sales tax (CST), revenue implications of SEZs, reduction of customs and excise duties, continuation of subsidies, development of self-help groups and greater efficiency in the tax structure, the statement said. Mps who attended the meeting include Jivabhai A Patel, Prahlad Joshi, Narsingrao H Suryawanshi, Gireesh Kumar Sanghi and M Ramadass among others.
The need for introducting schemes to unearth black money was emphasised. Creation of a corpus fund for farmers and restructuring of petro-prices were other issues that were brought up.
The minister allayed fears about the rising inflation rate by saying that the high inflation was an outcome of high growth rates. Net tax revenue receipts as a proportion of budget estimates have improved from 47.6% during April-November 2005-06 to 54.1% in April-November 2006-07, the minister said. The minister also emphasised that while interest burden as a proportion of GDP is decreasing, education loans have increased by three times as on end September 2006 over the previous year.