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New Delhi: The federal government is open to saying extra measures to stimulate demand within the economic system, a senior finance ministry official stated Tuesday, a day after the federal government introduced measures to spice up client spending.
“We aren’t ruling out additional measures if required,” stated the official who didn’t want to be recognized.
The federal government has been stressing on the necessity for a fiscally prudent strategy at a time when a number of economists have steered the Centre ought to improve spending to revive the economic system.
The finance ministry Monday introduced a bunch of measures, together with a scheme that encourages authorities staff to spend on shopping for client sturdy objects by way of a tax-free money voucher scheme issued in opposition to go away journey allowance. It additionally introduced again the pageant advance scheme for presidency staff. However the schemes is not going to have any further fiscal implications.
The federal government and the Reserve Financial institution of India (RBI) have, to this point, introduced stimulus package deal amounting to almost Rs 22 lakh-crore. However most of this help has been within the type of liquidity help measures, with solely a small fraction of the quantity by way of direct money transfers.
The Indian economic system contracted by 23.9 per cent in April-June and is anticipated to contract within the second quarter as effectively however by a decrease magnitude. Within the third bimonthly financial coverage evaluate introduced Friday, the RBI projected that the Indian economic system will contract by 9.5 per cent in 2020-21.
The official additionally stated the sale of presidency’s residual stake within the IDBI Financial institution is on observe, and so is the itemizing of the Life Insurance coverage Company of India on the inventory exchanges. Nevertheless, the official didn’t touch upon whether or not the federal government will be capable to meet the March 2021 deadline.
The federal government is all set to overlook the Rs 2.1 lakh-crore disinvestment goal in 2020-21 with Covid-19 disrupting the asset sale course of.
No choice on Vodafone enchantment but
The federal government is but to determine if it’s going to enchantment in opposition to the arbitration panel award in opposition to India within the Vodafone retrospective tax case, the official stated.
Final month, Vodafone had won a Rs 20,000 crore retrospective tax battle in opposition to the Indian authorities within the Everlasting Courtroom of Arbitration in The Hague.
Vodafone gained an enchantment in opposition to the federal government beneath the bilateral funding promotion settlement (BIPA) between India and Netherlands. However the Indian authorities is of the view that taxation issues should not beneath the purview of the BIPA.
“It’s the obligation of the federal government to take a look at all these facets earlier than arriving at a closing choice,” the official stated.
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