Finance Secretary Arvind Mayaram said here on Thursday that Budget 2014-2015 gives a very strong signal, as it is balanced, forward looking, and lays out a very strong foundation on which India can build upon very quickly a new growth momentum and gives a very clear direction of reforms which will be followed in the years to come.
"This budget gives a very strong signal. There is a substantial increase from the interim budget in the allocation for the defence sector and also for the internal security sector. There is a whole section of tourism and culture which expands between the economic activity as well as the activity which is necessary for the preservation and conservation of the Indian heritage like special focus for the protection of archeological sites, beatification of ghats and rivers and also for the cleaning and preservation of Ganga," Mayaram told media here.
Talking over the preservation of minorities he said, "New programs have been added and larger allocations have been made for the poor, marginalized, minority, downtrodden, women, Scheduled caste-Scheduled tribe to ensure there is equity and rights of poor are fully protected."
Mayaram said that lot of emphasis has been given to private investment which includes Foreign Direct Investment (FDI).
"Finance Minister Arun Jaitely had said in his speech many times that we need to create a virtuous cycle of investment and this investment is not only through public sectors, ultimately the investments which must come in manufacturing, in tourism, infrastructure, much of it also has to come from the private sector. So it's true that there is lot of emphasis on private investment which includes FDI. That is why there is liberalization of FDI regime in the budget," said Mayaram.
"We are sure that the FDI flows in the current year will be higher than what they were in the last year and in the next financial year they may be even more then what they are in this year," he added.
Over the fiscal deficit, Mayaram said that a fiscal space has been created in which Rs 22200 crores have been given as giveaways because of the direct taxes, the exemptions, etc which have been given, and Rs 7455 crores have been raised as indirect taxes.
"On the non tax side we have an increase of Rs 31752 crores. We have re-oriented many of the schemes announced in interim budget and created another space of Rs 10000 crores. Total fiscal space available to us is Rs 56400 crores in which the additional expenditures, etc that we have shown are coming from this particular space that we have created in the fiscal," said Mayaram.
Further, talking over the direct and indirect taxes he said, "In tax GDP ratio even for direct taxes in the current year we have taken them to 10.6 percent from 10.1 percent in last year and this 10.1 which was on estimation of 4 percent GDP has been risen to 5.5-5.9 percent this year. We believe that this tax buoyancy is possible."
However, over the indirect taxes he said that not much difference has been shown between last year and this year in terms of tax to GDP growth, as it has grown from 4.6 to 4.8 percent.
In the end he said that seeing the number of changes that have been made in the custom and excise duties it's expected that there will be larger inflow of components and intermediates for the manufacturing sector and therefore it is going to be a healthy growth in the custom duty realization.
He also clarified that nothing has been said in trading companies on FDI although there is large section of defence in which FDI can be flown very easily.
"Those companies which are manufacturing in India and have FDIs even upto 100 percent are permitted to sell their products through E-Commerce platforms," said Mayaram.
Earlier today, Jaitley presented the General Budget for fiscal 2014-15 in the Lok Sabha.
