Amidst high expectations of ‘quickfixing’ the badly battered economy, first and foremost on the agenda for the new union Finance Minister Arun Jaitley (most likely) and the newly sworn in Narendra Modi Government will be to present the full fledged Union Budget for 2014-15.
Most likely to be presented by June-end or early July during the Monsoon session of the Parliament, the passing of the Union Budget will be an important exercise this time in the wake of the Vote on Account (VoA) passed by the previous Finance Minister P Chidamabaram of the outgoing UPA on February 17th 2014.
Not only was the votebank luring VoA that was alleged to have been grossly ‘windowdressed’ by the outgoing FM but more so he was also said to have dabbled in ‘data juggerly’ by tweaking many of the Budget expenditures and passing it on the next Government, including the passing on Rs 35,000 crore subsidy burden on 2014-15. This was primarily to fudge the fiscal deficit target which the erstwhile UPA Government showed to have trimmed to 4.6 per cent of the GDP. The new Government now has a work cut out for it to not only fix the ‘rolled over’ Budget provisions but contain the fiscal deficit target to 4.2 per cent of GDP for 2014-15 also through higher tax and non tax revenue collections.
Highly placed sources said: “action is afoot in the North Block as officials are getting their acts together and are readying to arrange pre-Budget meetings with the new FM with economists, industry CEOs, business chambers, agriculturists as well as trade unions.” Since the time when Pranab Mukherji was the Finance Minister there has also been a new trend to invite State Governments to the pre-Budget meetings.
The new Government under Prime Minister Narendra Modi is likely to continue this trend as he himself was the part for the State delegation in the earlier pre-Budget discussions.
Meanwhile, there are speculations on the restructuring of the both the Planning Commission as well as RBI even as the North Block secretariat is said to see very little shake-up. “There are strong possibilities of the RBI Governor Raghuram Rajan being eased out as he is considered to have been pushed by IMF-World Bank backers,” highly placed sources said. Even as the new names are floating for key positions like Chief Economic Advisor and PM’s Economic Advisory Council Chairman.
On the agenda will also be a wide range of issues including that of keeping the inflation under control to reviving credit flow and stimulating industry growth through various tax and non-tax concessions. Amongst the priority list will be to resolve the ‘policy paralysis’ tag on the Government, and this would involve to stimulate investments in the manufacturing sector, push stock market and commodities market reforms. Experts are also of the view that the new Government would give a further push to the Urjit Patel committee on inflation targeting, financial sector reforms as proposed by the Fiscal Sector legislative Reforms Commission (FSlRC) as well as granting of the new bank licences and pushing the financial inclusion agenda. “Also on the agenda will be the granting or review of the ‘open skies’ policy under which new licences are being allowed to foreign and domestic fliers,” sources said. And also for that matter the retrospective Vodafone taxation matter will also be one the main agenda for the North Block and has become an eyesore for foreign investors having being raked up by former FM Pranab Mukherji while he was in office.