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Finance Secretary forecasts 8% GDP growth in next fiscal

BUDGET 2000

The economy is firmly set on the path of attaining a 7-8 per cent Gross Domestic Product growth rate with good prospects for creating job opportunities in the private sector in the next fiscal year, India's Finance Secretary P G Mankad said today.

Addressing a meeting of the Associated Chambers of Commerce and Industry of India or ASSOCHAM in New Delhi today, Mankad said, the economic fundamentals are sound and the Budget numbers are right as there was nothing sacrosanct about the deficit being below the 5 per cent mark.

He said the deficit could easily have been pegged at below 4 per cent if the finance minister had provided for just half the increase of Rs 130 billion as defence expenditure in 2000-2001.

Reacting to criticism over the soft divestment target for the next fiscal year, the finance secretary said the Budget proposals have been framed with realistic numbers in mind.

He said, the government can achieve and even surpass its ''realistic'' divestment target of Rs 100 billion for 2000-2001 fiscal through various options like strategic partners, dilution of stake in the domestic and overseas markets, instead of big-ticket privatisation.

Mankad hoped that the economy will grow by 7-8 per cent this fiscal and surpass it in the future as agriculture, construction, infrastructure and information technology sectors realise the benefits of the Budget proposals.

Responding to the concerns expressed earlier by ASSOCHAM president Shekhar Bajaj over the cascading effect of the increase in the tax on dividends, the finance secretary assured them that he would have the issue examined closely by the revenue department and take corrective action if required.

Mankad sought to dispel the impression that downsizing of government would be a major source of reduction in administrative expenditure. ''Downsizing will not make any significant dent on savings. All that it would perhaps do is to make the government more focussed and efficient.''

He reiterated that the rationalisation of indirect taxes would send a clear signal to the Income Tax Department to get off the back of industry and lay the ground rules to ensure predictability.

Never before has simplification of indirect taxes been such an integral part of the Budget as this time. This he said would go a long way in reducing pre-Budget lobbying and submission of extensive memoranda.

UNI

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