Finance Minister Pranab Mukherjee said today the lesson India must learn from the Greek crisis is that it cannot stray from the path of fiscal discipline. Greece paid the price for being fiscally profligate and India could not afford to keep its deficit unchecked, he said.
In an interview to Business Standard, Mukherjee reiterated his resolve to bring down the government’s fiscal deficit this year and in the next few years, but hinted at more taxation measures next year to boost revenues to compensate for the loss of one-time benefits he enjoyed from 3G auction proceeds and other expenditure savings in 2010-11.
The interview was held just a day before the United Progressive Alliance (UPA) government's first anniversary in its second tenure. It covered a wide range of issues from oil sector reforms, disinvestment, growing differences over jurisdiction between financial sector regulators and the future course of reforms.
On being asked why the government had taken no steps to raise oil prices, Mukherjee said the government had already restructured the duties on petroleum products as the first step and now the question of linking the domestic prices to the international market was being discussed by a group of ministers.
Mukherjee ruled out privatisation of state-owned enterprises and said the government’s agenda on this front was restricted only to reducing the government stake in public sector undertakings up to 51 per cent to help them become more efficient and discover their true prices in the stock market.
He was confident of meeting his target of rolling out the new direct taxes code and the goods and services tax (GST) regime from the next financial year. “The new direct taxes code will be in Parliament during the monsoon session,” he said.
On inflation, Mukherjee said his worry arose from the fact that food inflation had begun affecting the general inflation rate. But, what gave him comfort was the decline in the prices of several food items over the last three months.
The finance minister also said the government was prepared to face the challenges arising out of any sharp rise in capital inflows, though he declined to comment on the desirability of levying any foreign transaction tax to stem such flows.
