The tariff value of edible oils is reviewed along with other goods that are subject to tariff values.
MEXICO
Mexico 1:
Report by the Secretariat
I. Economic Environment (1) Overview: Paragraph 2; and
I. Economic Environment (3) Fiscal Policy: Paragraph 13, 14
Report by the Government
II. Economic Environment (6) Challenges (ii) Fiscal Deficit: Paragraph 37
While we recognize that due to the effects of global crisis India has not achieved the fiscal deficit reduction as scheduled, we wish to ask what measures are being proposed in the future to achieve this goal.
Reply: The Government of India has enumerated the accelerated fiscal consolidation path through expenditure correction guided by the principles of gradual adjustment from the fiscal expansion during the crisis period in 2008 09 and 2009 10. The Government is able to bring down the estimated fiscal deficit in 2011 12 to 4.6% of GDP. Reduction in overall expenditure would be the key to the fiscal adjustment path in India. As per the roadmap on fiscal consolidation, the fiscal deficit is projected to be brought down to 4.1% of GDP in 2012 2013 and 3.5% in 2013 14. In order to keep the overall expenditure under the estimated level, the following measures are proposed by the Government of India:
To control the growth of expenditure on subsidies and related items which is a major component, the Government has firmly established the practice of providing petroleum and fertilizer subsidy in cash instead of securities. The Government has moved towards nutrient based subsidy (NBS) regime in fertilizer subsidy and with respect to rationalization of petroleum subsidy, it has already decontrolled the pricing of petrol.
To arrest diversion of other subsidized items like kerosene oil, and LPG the government will move towards direct transfer of cash subsidy to people below poverty line in a phased manner.
To determine the effective imbalance in the revenue account which the government has to eliminate, better depiction of revenue deficit through "effective revenue deficit" is being used as a fiscal indicator from the current financial year, which factors the imbalance in revenue account owing to grants for creation of capital assets.
The FRBM rules prescribe a cap of 0.5% of GDP in any financial year on the quantum of guarantees that the Central Government can assume in a particular financial year which would put a limit on the stock of contingent liabilities and for better management of contingent liabilities the government guarantee policy has been framed which lays down the principles to streamline the liability management by the Government.
The Government policy towards borrowings to finance its deficit would be anchored on the principles of greater reliance on domestic borrowings over external debt, preference for market borrowings over instruments carrying administered interest rates, consolidation of the debt portfolio and development of a deep and wide market for government securities to improve liquidity in secondary market.
On the revenue side, implementation of GST would help in further improving the compliance and thereby increase the overall indirect tax collection. Rationalization of tax structure through moderate levels and few rates, implementation of Direct Taxes Code (DTC) integrating all direct tax laws, widening of the tax base and reduction in compliance costs through improved tax administration, adoption of IT solutions and re engineering the business processes would foster less intrusive tax system and would increase buoyancy in tax revenues and help in fiscal consolidation.
