Some more steps on the anvil to narrow CAD, says Jaitley
New Delhi, Oct 6 : Asserting that the government is determined to meet the fiscal deficit target, Finance Minister Arun Jaitley Saturday said some more steps are on the anvil to narrow the current account deficit (CAD) and bolster forex inflows.
Speaking at the HT Leadership Summit here, he said India will continue to be the leading destination of foreign direct investment despite the adverse global situation.
However, he said, there could be some transient problem in foreign portfolio investment but these would not continue depending on the global situation.
The finance minister said maintaining fiscal prudence is one of the top priorities of this government.
“One of the top priorities was and I do believe in that maintaining fiscal prudence always helps and you can afford to take liberties only when fiscal position is strong and not otherwise,” he said.
“Gradually on fiscal deficit we had glide down from 4.6 per cent we are now targeting 3.3 per cent (of GDP) this year and I am quite certain with the kind of revenue coming particulary from the direct taxes, we will achieve that,” he said.
As far as current account deficit (CAD) is concerned, Jaitley said it is linked to global oil prices because forex is mostly spent on crude.
“The way the (crude oil) prices are going up, the highest in the last 4 years, it is going to be some adverse impact on the CAD. Now we are trying our best to take measures to narrow it.
“Some more steps are likely but there are two factors… external one is the oil prices and second is the policy with the United States which is leading to hardening of the dollar itself therefore adversely impacting all currencies of the world,” he said.
He, however, did not disclose steps to be taken by the government for narrowing CAD.
Citing some of the steps to bridge CAD and bolster flows in the recent past, Jaitley said the sovereign borrowing target was reduced by Rs 70,000 crore for the current fiscal and withholding tax on masala bonds has been withdrawn for the moment.
Besides, he said, the government recently allowed public sector oil marketing companies to raise USD 10 billion through external commercial borrowing (ECB).
On Indian economy, he said, the ability of the country to maintain the present growth rate for a decade or two is reasonably certain.
Banks, telcos could be allowed to use Aadhaar
New Delhi, Oct 6 : Finance Minister Arun Jaitley Saturday said a Parliament approved legislation can restore mandatory linking of biometric ID Aadhaar with mobile phones and bank accounts, but did not say if the government will bring a new law for the same.
The Supreme Court had last month upheld the Constitutional validity of Aadhaar, the 12-digit biometric based unique identity number, but restricted its use by private entities like telecom operators for verifying identity of mobile phone user.
Jaitley said the verdict was a “very sound judgment” as the court accepted that there is legitimate state aim in Aadhaar.
“Aadhaar is not a citizenship card,” he said at the HT Leadership Summit here. “Because after all you have a system where you give a lot of government money in form of various support and subsidies to all kinds of people. That was the principle objective of Aadhaar.”
The Supreme Court, he said, upheld most of what Aadhaar does.
“What had not been upheld falls in two categories. One is the principle of proportionality that Aadhaar will help in these cases and then do it by an appropriate law.
“So the whole argument which was given that private companies can’t use it, there is Section 57 which says you can authorise others either by law or contract. So what has been struck down is by contract,” he said.
Finance Minister said a legal provision through a legislation can restore linking of Aadhaar with mobile phones and bank accounts.
“By law it can still be done, provided you do it under the adequate provision of law and do it on the basis of that in this field it is necessary,” he said.
He, however, did not say if the government plans to bring a law in Parliament for the purpose.
Jaitley said the Supreme Court has permitted Aadhaar linkage in several areas like income tax, based on “the principle of proportionality”.
“If you are able to show the kind of data that in mobile telephony it (Aadhaar linkage) will help, it can happen. So mobile and bank accounts are two critical areas,” he said.
The Supreme Court declared constitutional the government’s extraordinary attempt to give every resident a biometric ID. It, however, drew a clear line between two kinds of use for biometric authentication — its use for state-provided services like payment of subsidies and taxation records was declared acceptable but restricted its use as authentication tool by the private sector like telecom companies and banks.