The government is not considering any further tax cuts to tackle the impact of drought, finance minister Pranab Mukherjee said while speaking at the annual meeting of chief commissioners and directors general of Central Board of Excise and Customs (CBEC) in the Capital on Tuesday.
The finance minister expressed concern at the negative growth of indirect tax receipts. He said up to July 2009 in the current financial year, indirect tax receipts had shown a negative growth of 28% compared to the last year. No doubt, this trend reflects the overall slowdown of the economy and the effect of stimulus measures through reduction of excise duty rate, the minister said.
But despite a negative growth, the finance minister said he was hopeful of meeting the indirect tax target of Rs 270,000 crore. By the trend we have noticed in the first two quarters, it indicates things will improve by the third quarter, Mukherjee said.
Appreciating the role of Central Board of Excise and Customs, the finance minister said, The tax base of indirect taxes has grown steadily and as a share of gross domestic product has gone up from 9.2% in 2003-04 to 12.6% in 2007-08. He promised to revert to the path of fiscal consolidation at the earliest.
Mukherjee said the 10% cut in non-plan expenditure in 2009-10 by all ministries and departments a directive for which was issued by the finance ministry on Monday would help ensure availability of resources to meet critical development schemes.
On meeting the deadline of April 1, 2010 for implementation of Goods and Services Tax (GST), the finance minister said not all states were on board as of now. There are differences and the Centre is working in close coordination with the empowered group of state finance ministers to reach a consensus, he said. The next meeting of state finance ministers has been fixed for September 16.