Amidst rumours about his health, outgoing Union Finance Minister Arun Jaitley, on Friday, held a meeting with all five secretaries of his ministry to take stock of the current economic scenario in the country.

At the meeting, Jaitley also extended by two months till July 31 the deadline for submission of the direct tax code (DTC) report. Earlier, the DTC report was to be submitted by May 31.

According to an official, Jaitley reviewed preparedness for the full general Budget for 2019-20, and took stock of tax collection and the present economic situation.

Another official added that it was a customary meeting at the end of his term asFinance Minister and that the discussions were informal. The meeting lasted for almost 90 minutes, and also deliberated upon on the road ahead for the economy.

The meeting was attended by Finance (also Economic Affairs) Secretary, Subhash Chandra Garg; Revenue Secretary Ajay B Pandey; Expenditure Secretary Girish Chandra Murmu; DIPAM Secretary Atanu Chakraborty; and Financial Services Secretary Rajiv Kumar. CBDT (Central Board of Direct Taxes) chief PC Modi and CBIC (Central Board of Indirect Taxes and Custom) chief PK Das also attended the meeting.

The Finance Ministry is getting ready for the presentation of the full general Budget of the new government. It is likely to be tabled during the first 10 days of July.

The outgoing Modi government presented the interim Budget on February, 1 along with seeking a vote on-account from Parliament for the expenditure for the April-July period.

Now the full Budget has to be approved by Parliament on or before July 31 so that there is no problem in spending from August 1.

One of the key challenges for the Ministry is to set a new revenue target. A Finance Ministry official did indicate that target could be lowered in the full Budget. It may be noted that the interim Budget did revise direct tax collection target to ₹12 lakh crore for 2018-19, from the ₹11.50-lakh crore earlier. Accordingly, the Budget estimate for 2019-20 is ₹13.8-lakh crore (exclusive of ₹12,800 crore for STT).

The actual collection for 2018-19 failed to reach the revised estimate, and is expected to be around ₹11.50-lakh crore (the Finance Ministry has yet to give the number officially). This means, if the government sticks to the Budget estimate for 2019-20, it will require a growth rate of about 20 per cent (exclusive of STT). Officials feel that it may not be realistic, which means the estimate needs to be revised.

Fitch’s take

Global rating agency Fitch, on Friday, said the final Budget for FY20 will give an indication on whether the BJP will step up economic reforms and return to fiscal consolidation after moderate fiscal slippages in recent years.

The agency said that more policy details are likely to emerge in the next government’s first Budget. It should also provide meaningful guidance on the medium-term fiscal outlook. Fiscal consolidation has stalled under the BJP in recent years, and its campaign promise to support farmers’ incomes has added to the spending pressure. The Central government estimated its own FY19 deficit at 3.4 per cent of GDP in February’s interim Budget, and targeted the same figure for FY20.

“Fitch forecasts a general government deficit of around 7 per cent of GDP in both years,” it said.

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