Finance Minister Arun Jaitley on Thursday said the BJP-led NDA will continue with fiscal prudence and lower tax rates if elected back to power.
He further said the GST (Goods and Services Tax) Council has cut tax rates on consumption items to 12 or 18 per cent from the highest slab of 28 per cent and lowering rate on cement is next on agenda.
“I speak in terms of taxation policies… I’m quite clear in my mind that on two issues at least we had – a lot of good fiscal prudence and we brought the rates down, these are two areas, if we are in power we will continue the same glide path,” Jaitley said while addressing the CII AGM here.
The general elections will be held in phases beginning April 11 and counting of votes will take place on May 23.
Arun Jaitley said India’s growth has stabilised between 7-7.5 per cent and irrespective of global trends, domestic consumption is going to increase.
“We have come to 7-7.5 per cent (growth rate) range despite the fact that there is no global boom or support of any kind, and we have stabilised at that, you need to graduate further,” he added.
The minister said that over the last 5 years the government did not increase tax rates, and in some cases doubled tax base and increased tax collection.
“In the last 20 odd months of the GST except for Cement that is because of affordability, … every item of consumption has come down to 18 per cent and 12 per cent category from 28 per cent. So, it is only a matter of time that the last one also comes down,” Jaitley said.
Asked what steps would be taken if the government comes to power, Arun Jaitley said, “Wait for a couple of days, when our manifesto comes out, you may find some of the views expressed in that”.
The government had revised upwards the fiscal deficit target for 2018-19 fiscal to 3.4 per cent from 3.3 per cent projected in the budget.
For current fiscal, which began on April 1, the fiscal deficit target has been set at 3.4 per cent.
The Reserve Bank of India (RBI) on Thursday cut its repo rate or the rate at which it lends to banks, by 25 basis points to 6 per cent bringing interest rate to the lowest level in one year on softening inflation.
This is the second consecutive rate cut from RBI under new chief Shaktikanta Das, after a surprise rate cut in February.
The benchmark interest rate was cut by 0.25 per cent to 6 per cent, a move that will result in lower cost of borrowing for the banks that are expected to transmit the same to individuals and corporates.
The RBI had on February 7, in its sixth bi-monthly policy statement for 2018-19, reduced the repo rate by 25 basis points from 6.5 per cent to 6.25 points.
The development comes just a week ahead of the Lok Sabha elections.
(With PTI inputs)