The Union finance minister, Mr Pranab Mukherjee, on Tuesday indicated that there would be a further roll back of the stimulus package as there are positive signs of economic growth not only in GDP but also in international trade. Both exports and imports in the non-oil sector (chemical goods) registered a positive growth for six consecutive months since November.
Speaking at the 102nd AGM of the Indian Merchants Chamber on Tuesday, Mr Mukherjee said the stimulus package of Rs 1,85,000 crore which was three per cent of GDP was not sustainable and the government had to come back to the path of fiscal prudence. The minister said he had done a partial roll back in his budget and would decide the future course.
Mr Mukherjee said that the immediate task was to get back to the nine per cent GDP growth path and cross the barrier of double-digit growth.
To achieve this, the minister said he had introduced the two major tax reforms, namely the Direct Tax Code (DTC) and the Goods and Services Tax (GST).
In the case of the DTC, he said that all the concerns expressed by groups across the country would be taken into consideration and the final draft would soon be ready and put up for comments. He hoped to introduce it in Parliament soon.
But the GST, he said, needed the support of states. Only 15 of the 38 states have supported it and he needed all the states to ratify the amendment for it to get through Parliament. He hoped bodies like the IMC could convince their respective states of the advantages of GST in the same way as they benefited from the value added tax.