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After assuming office on Tuesday, the new finance minister might immediately begin with the Budget-making process, as the ministry has lined up a slew of presentations to brief him on key issues and work done so far.
The PowerPoint presentations prepared for the FM are more elaborate than those to be given to Prime Minister Narendra Modi this week. Apart from explaining the functioning of various departments to the new minister, officials would also be given directions from him on various pending issues.
“We feel the tax targets given in the interim Budget need to be revised but any changes we make will have implications on the fiscal deficit. We will tell him the problem, suggest some solutions and wait for his directions before moving further,” said an official.
As North Block offices were shut after 1 pm on Monday due to security for reasons owing to the swearing-in ceremony of the new government at Rashtrapati Bhawan, some officials in other ministries headed to nearby golf courses. However, others looked prepared to burn the midnight oil.
Officials from the department of economic affairs (DEA) rushed to the office of the National Institute of Public Finance and Policy in South Delhi to give final touches to their presentation. Expenditure department officials headed towards the office of the Controller General of Accounts at Lok Nayak Bhawan in Central Delhi and Revenue department officials decided to take work home. “We are running against time. Everyone has to reach office early tomorrow,” said an official.
Beside the Budget, scheduled around July, issues such as inflation, the fiscal deficit, monetary policy and bringing the department of industrial policy and promotion under the finance ministry will top the DEA’s agenda.
The revenue department will also get clearance from the new government on whether it should go ahead with duty exemptions announced in the interim Budget by then finance minister P Chidambaram in February. It will propose to him a review of duty cuts on automobiles and consumer durables, leading to a revenue loss of Rs 500 crore a month. Some of the excise duty concessions announced in the interim Budget would automatically expire after June 30 if the new government doesn’t take a call on extending these in the new Budget.
In the case of mobile handsets, it is not up to a particular date but for capital goods and the automobile sector, the new rates are valid till June. It might also propose a reduction in gold duty to a level where both smuggling and the current account deficit are under control.
The revenue department will also brief the FM on issues such as high revenue targets and profess on the Goods and Services Tax and the Direct Taxes Code (DTC).
“On DTC, the ministry will wait for guidance from the new minister, as we feel he might not like to work on former minister P Chidambaram’s Bill,” said another official.
The expenditure department will stress on cutting subsidies. The banking department will highlight the problems of rising bad loans, recapitalisation and consolidation of public sector banks. The disinvestment department will discuss possible stake sale options with the minister.
