İrem UZUN –TDO- While reduction in corporate tax rates deprived the government of US$20 billion in revenues, there emerged raised fears of spending cuts.The finance minister said on Sunday that India will not revise its fiscal deficit target immediately and is not planning any spending cuts at this stage.
After Finance Minister Nirmala Sitharaman slashed corporate tax rates by almost 10 percentage points on Friday to boost private investment, there was speculation that the government may have to carry out spending cuts, as it had claimed that lowering of taxes would lead to a revenue shortfall of 1.45 trillion rupees (US$20.37 billion).
“We want ministries to spend... Expenditure secretary is meeting secretaries from other departments every week to push spending by departments and PSUs (public sector undertakings),” Sitharaman told media persons on Sunday, stressing that the government is not considering any reduction in spending.
The minister said the government will continue to focus on disinvestment as planned, pointing out that 23 companies had been approved by the Cabinet Committee on Economic Affairs (CCEA)