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India plans fiscal deficit cut to 3.5% of GDP

Staff writer ▼ | March 1, 2016
India plans to cut its fiscal deficit to 3.5% of gross domestic product (GDP) for 2016-17, from 3.9% the year before, according to the country's finance minister Arun Jaitley.
Arun Jaitley
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Presenting his government's annual budget to parliament, Jaitley also said India would remove 13 different taxes and streamline its taxation norms, which would "simplify doing business" in the country, and boost business confidence.

No service tax would be levied on houses built under 60 square metres, while a tax holiday was announced for start-ups for three of five years of setting up the company. However, excise duty on tobacco products was hiked by 10% to 15%.

Jaitley also identified 160 airports and airstrips in Indian which "could be revived." Elsewhere, the finance minister said the government would permit 100% foreign direct investment (FDI) in marketing of food products produced and manufactured in India, via its established single window clearance procedures for overseas investors.

The government also said small shops would be given the choice to remain open on all seven days a week. On the monetary policy front, Jaitley said the country's Reserve Bank of India Act would be amended, so that its central bank benefits from a monetary policy committee. The move is in line with a reform sought by RBI governor Raghuram Rajan.