Seminar on Interim Budget (2019-20) and Economic Analysis

It's not India's fiscal deficit that's worrying per se but it's the composition, said some of the panelists at the Business Standard Smart Business discussion on the Interim Budget 2019-2020, in association with The Institute of Chartered Accountants of India, Kolkata.
 

Subhashish Gangopadhyay, Research Director, IDF and Professor of Emerging Market Finance, University of Groningen, Netherlands, said, the fiscal deficit was not the issue but it was the composition. "That is where the problem lies in India."
 

In terms of revenue collection, Gangopadhyay said, the government was following a policy which would make it more and more difficult to get money, and cited the example of disinvestment where there was a cap of 51 per cent. "On the expenditure side we are following a policy which will never come down," he said.
 

Ambarish Dasgupta, Senior Partner, Intueri Consulting LLP, added, "When fiscal deficit originates more from revenue expenditure, then the expenditure is not going towards asset formation and enriching the balance sheet of the country. But if it is coming from capital expenditure then assets get created." 
 

Sugata Marjit, former Vice Chancellor, University of Calcutta, Reserve Bank of India and Professor of Industrial Economics at the Centre for Studies in Social Sciences, Calcutta and Project Director - Centre for Training & Research in Public Finance and Policy, pointed out, "When you target a fiscal deficit, one has to be pragmatic as to how to accommodate a sudden increase in government commitment to the tune of Rs 75,000 crore as income support programme for the farmers. The arithmetic has to be thoughtful."
 

Diparun Mukherjee, Associate Director, Tax & Regulatory Service PwC, and T B Chatterjee, Chairman, Indirect Taxation, Bengal Chamber of Commerce & Industries, Senior Partner, Tax Connect Advisory Services LLP, lauded the rebate for taxpayers.
 

Mukherjee said it was a win-win measure. "From a government perspective, will it be a revenue loss? The Kelkar Committee report had mentioned that the Rs 2-5 lakh category of taxpayers were the least compliant. So the government's compliance cost of recovering taxes is perhaps more."
 

Chatterjee said, "Up to an income of Rs 10 lakh, provided an individual has investments, he will be exempted from taxation. The middle class will be significantly benefited."