By IANS,
New Delhi: The government must aim for growth with fiscal prudence, Finance Minister Pranab Mukherjee said here Thursday, even as he pushed for a pan-India goods and services tax from April next year.
“High levels of fiscal deficit are not sustainable in the medium to long term, both for the states and the centre,” the finance minister told a pre-budget conference with finance ministers of states and union territories.
“We have to deliberate on ways and means to bring back the economy to a higher growth trajectory without fiscal profligacy. We have to resume the process of fiscal consolidation at the earliest,” he added.
“Fiscal stimulus measures of the central government had a cost in terms of deterioration of the centre’s fiscal deficit, which went up to 6.2 percent of gross domestic product in 2008-09.”
Mukherjee said the states also needed to focus on introducing goods and services tax from April 1 next year, calling it a critical part of the country’s economic reforms programme.
“I request all chief ministers and finance ministers to resolve all the pending issues expeditiously.”
The minister also said despite the global financial crisis and economic gloom, India had managed a high growth, thanks to the three stimulus packages of the federal government and the steps taken by the central bank.
“In a difficult year like 2008-09, when most of the economies struggled to stay afloat, India recorded a GDP growth of 6.7 percent and is the second fastest growing economy in the world.”
Looking forward, Mukherjee was hopeful that the Indian economy will continue to perform relatively better than others.
“Recent data on the performance of six core industries – crude oil, petroleum refinery products, coal, electricity, cement and finished steel – in April gives us further confidence of bringing back the economy on to growth path.”