Surcharge on the rich is modest: C Rangarajan

The finance minister has said he will stick to the fiscal deficit target of 5.2 per cent of GDP for the current financial year. I am quite sure that the target to rein in the  fiscal deficit at 4.8 per cent of GDP for the next financial year will be met. The surcharge imposed on the rich earning over Rs 1 crore of taxable income and raising the surcharge on companies with a total income of Rs 10 crore are modest under the circumstances. Also, these surcharges are only for one year. We believe in stable and modest tax rates. The finance minister did not give much relief on the threshold exemption limit, but you cannot keep revising it every year.

The measures announced since September and in the Budget will help propel the economy to higher rates next year. We believe the economy will grow by 6.5 per cent in the next financial year. For the current financial year, we believe that when the actual data comes in, economic growth will be in the range of 5.5 to 6 per cent against advance estimates of 5 per cent.

The Economic Survey said an adequate number of jobs was not being created in the economy. Job creation is a long-term goal. However, the finance minister talked about skill development — skilling 50 million people in the 12th Plan period (2012-13 to 2016-17). Jobs would be created by two ways — by imparting skills and through the growth momentum of the economy.

C Rangarajan
Chairman, Prime Minister's Economic Advisory Council