Finance Minister Shri Arun Jaitley ,today tabled the Economic survey for the Financial Year 2013-14.Major Highlights of the survey is summarised as under.
- Growth forecast for Next Fiscal to remain between 5.4 to 5.9 per cent.
- WPI Inflation Shows Sign of Receding fell to 5.98% during 2013-14
- Biometric Identification to Improve Subsidy Schemes
- 67.11 lakh members enrolled under the National Pension System with a corpus of Rs 51.14 crore.
- GST to be a Major Milestone for Indirect Tax Reform
- Fresh Thinking on a Responsible Fiscal Policy Framework Required
- Low and Stable Inflation, Tax and Expenditure Reform and a Well-Functioning Market Economy a Must to Improve Long-Term Growth Prospects
- Need to Promote Structural Changes in Manufacturing in the Medium Term
- External Debt Remains within Manageable Limits
- India’s Foreign Exchange Reserves Increase
- India has the Second Fastest Growing Services Sector with Compound Annual Growth Rate at 9.0 Per Cent
- Annual Average Exchange Rate Goes UP
- India’s BoP Position Improves Dramatically in 2013-14
- Economic Survey Underlines Significant Improvement in BoP Position
- The passage of the PFRDA Act, the shift of commodity futures trading, FSLRC report were the three major milestones of the year 2013-14
- Fiscal deficit for 2013-14 contained at 4.5% of the GDP
- Fiscal Outcome of Central Government in 2013-14 achieved; Fiscal Deficit Contained at 4.5% of the GDP
- Long-term Borrowings Account for 78.2 per cent of Total External Debt
- Sustaining Improvement in BoP Position – A Challenge
- The Economic Survey 2013-14, presented today in the Lok Sabha by the Union Finance Minister Shri Arun Jaitley, has noted that as India had a large trade deficit in the first quarter,
- Urgent Initiatives in Infrastructure, Iron and Steel, Textiles, Aviation, and Mining
- Performance of Core Industries and Infrastructure Services shows a Mixed Trend in 2013-14;
- Next Wave of Financial Reforms to Strengthen Institutional Foundations for a Globalized India
- Economic Survey asks the government to move towards a Low and Stable Inflation Regime through Fiscal Consolidation.
Other points which are related to Taxation are given below.
Improvements on both tax and expenditure are needed to obtain high quality fiscal adjustment. The tax regime must be simple, predictable and stable. This requires a
- single-rate goods and services tax (GST),
- fewer exemptions in direct taxes, and a
- transformation of tax administration.
Government expenditure reform involves three elements:
- shifting subsidy programmes away from price subsidies to income support,
- a change in the focus of government spending towards provision of public goods, and
- a focus on outcomes through an improvement in systems of accountability.
A focus on health and education outcomes, rather than inputs and expenditure must be a priority. Improvements in credit ratings, lower inflation, lower cost of capital, and greater business confidence that would ensue will yield short-term benefits in response to long-term initiatives.
GST to be a Major Milestone for Indirect Tax Reform
There is consensus that the GST will be a major milestone for indirect tax reform in India. Replacing all existing indirect taxes by the GST will create a national market, eliminate cascading taxes, and align taxation of imports and exports correctly. This will improve the competitiveness of production and export from India. The implementation of a Central GST (CenGST) could be the first step towards the GST. Once the CenGST is implemented, and the information technology system for CenGST has worked, estimation risk will be lower and it will be easier for the centre and states to move to the GST.
DTC required as a Clean Modern Replacement for existing it laws
The DTC is required as a clean modern replacement for the existing income tax law. As with the GST, the key objective must be a simplification with a clean conceptual core, and the removal of a large number of special cesses and exemptions that favour special interest groups. The tax system must move away from industrial policy, with incentives for one activity or another, towards a simple framework.