Home Economy Time not right to raise taxes, says finance secretary

Time not right to raise taxes, says finance secretary


New Delhi : Tax rates were not raised in the 2009-10 budget proposals as economic conditions remained difficult while tax relief for individuals would help boost consumption, Finance Secretary Ashok Chawla said here Monday.

The finance minister has left unchanged the excise and customs duty cuts that were announced following the global economic meltdown because “the time is not yet right to raise any tax rate. The finance minister has done away with surcharge on income tax which was yielding Rs.5,000-6,000 crore,” Chawla told reporters here.

He was talking to the media after Finance Minister Pranab Mukherjee presented the annual budget in Parliament Monday.

Expecting the GDP to grow at 7 percent this fiscal, Chawla said it was the conscious decision of the government to go for a higher fiscal deficit so that the economy could return to high growth rates.

“The objectives we focussed on were sustaining high levels of growth, increase in public spending and boosting private investment,” said Chawla.

He also said that divestment of state-run firms would help the government to reduce the fiscal deficit and such stake sale would be carried out in a phased manner.