New Delhi, Jan 13 (ANI): Finance Minister Pranab Mukherjee held a pre-Budget meeting with the Finance Ministers of States and Union Territories here today to deliberate on issues that would have a bearing on the annual Budget for 2010-11.
Addressing the meeting, Mukherjee expressed hope that this meeting with the Finance Ministers of States becomes an annual feature.
"Economic revival is necessarily a collaborative effort of the Union and State Governments. When the Budget 2009-10 was presented in July 2009, the Indian economy was going through a very difficult phase due to the adverse impact of global financial meltdown," he said.
"The Government revenue had dipped because of slow down in the economy and due to the tax concessions given as a part of the Government's policy response to the crisis. Despite several constraints, the Government allocated an additional amount of Rs. 40,000 crore for the current year's annual plan over and above the Interim Budget," he added.
He observed that high levels of public spending and decline in revenue streams have resulted in deviation from the FRBM targets and highlighted the need to return to a path of fiscal consolidation at the earliest without compromising the growth momentum and in the long term interest of the economy.
He also expressed hope that the implementation of Direct Taxes Code and GST, would lead to broadening of tax base, simplification of the tax structure and improvement in tax compliance.Expressing concern over the increase in food prices including that of rice, wheat, pulses and vegetables which is sorely affecting the common man and his Budget, the Finance Minister said that the price rise in sugar could be attributed to demand side issue, but the price rise in rice, wheat, pulses, vegetables is primarily a supply side issue that need to be collectively addressed both in the short and the medium to long term.
Emphasizing that there are enough wheat and rice stocks, he highlighted the need to address the problem of distribution to arrest the price rise in food items.
Mukherjee said that the rising fertilizer subsidy and its unintended impact is a major area of concern.
"To mitigate the impact of current practices of fertilizer subsidy we are in a process of developing a new system of fertilizer subsidy, which may involve a direct transfer of subsidy to the farmers and also a system which promotes nutrient based subsidy regimes," he added.
Highlighting the global environmental challenges, the country is facing today, Mukherjee said that mitigation and reduction of green house gases involves a heavy cost in terms of technology upgradation and also in terms of access to alternate sources of energy which, at present, are more costly than the conventional sources of energy. (ANI)