New Delhi, July 5 : Finance Minister Nirmala Sitharaman on Friday gave a clarion call for India to get 'fully integrated' into the global value chain of production of goods and become part of the financial system but shied away from the announcement of any big jump in public spending as was speculated.
Announcing a slew of measures to attract investment, the maiden Budget proposals after the recent 17th Lok Sabha polls, propose 100 per cent foreign ownership to be permitted for insurance intermediaries and that local sourcing norms will be eased for Foreign Direct Investment in retailers selling a single brand. As of now, the government allows foreign direct investment in single-brand retail but mandates investors to source locally 30 percent of the value of goods purchased.
"The Government will examine suggestions to further open up FDI in aviation, media (Animation,Visual effects, Gaming and Comics) and insurance sectors in consultation with all stakeholders," she said.
Foreign ownership through the automatic route in the insurance sector is allowed up to 49 per cent as of now and thus the new measure could unleash angry reactions and backlash from the trade unions, including right wing bodies Swadeshi Jagran Manch and Bharatiya Mazdoor Sangh.
In a statement, BMS president C K Saji Narayanan said there are "certain proposals mentioned in the budget which need to be discussed with trade unions as representing the major stakeholders affected before being implemented.'' The Budget proposals say electric vehicle components, camera module and charger of mobile phones and set-top boxes will become cheaper.
But petrol, diesel, gold, silver, cigarettes, fully-imported cars, split air conditioners and other items will become more expensive due to hike in taxes. FM also said that the fiscal deficit would be 3.3 per cent of Gross Domestic Product in the fiscal year ending March 31, 2020 and essentially this could be achieved only by higher tax collections.
The economy has been under stress and often the Modi government has been at the receiving end
as growth for the last fiscal was a five year low of 6.8 per cent. There have been worrying moments as automobile sales have dipped and the index of industrial production has also plummeted.
The Budget proposals also sought to raise import duties on gold and other precious metals to 12.5 percent from 10 and levied a cess one rupee per tonne on crude oil to boost the revenue.
Addressing a media conference later, the Finance Minister said the budget proposals she has presented in Parliament has ''a ten-year vision in mind'' but it is realistic in terms of achieving targets.
''All the targets are reasonably realistically placed....and every target that we have given, tax collection and revenue collection are absolutely within reasonable limits,'' Ms Sitharaman said.
Referring to the proposal to pump in Rs 70,000 crore in public sector banks, she said the debate over the issue that the lenders are not passing on the benefits to the customers, is ''squarely addressed''.
The finance minister said the government's support to banks would help it provide lending and also spur economic growth. UNI