Finance Minister P Chidambaram told the state Finance Ministers on Wednesday that he will outline amendments to the Constitution on the Goods and Services Tax (GST) in his Budget speech if there is consensus among the states on the issue.
The government will take all steps to contain fiscal deficit and pursue reforms to deal with economic challenges, Finance Minister P Chidambaram said on Wednesday.
"The fiscal consolidation roadmap for Centre has been laid out and the government will not breach the fiscal deficit limits," he said during pre-Budget consultations with state finance ministers.
The government has chalked out a plan to restrict the fiscal deficit to 3 per cent of GDP by 2016-17.
Chidambaram highlighted the challenges before the economy and the urgency of reform measures needed to address them.
"The second major challenge that the economy faces is the high Current Account Deficit (CAD) level," he said, adding that foreign investment is not an option but an economic imperative.
He also asked the states to fast track clearances needed for investment proposals. An official release said that he felt that if "we take concrete measures to tackle these challenges, next year would be a better year".
Meanwhile, sources said that Chidambaram told the state Finance Ministers that he will outline amendments to the Constitution on the Goods and Services Tax (GST) in his Budget speech if there is consensus among the states on the issue.
On the issue of states' demand of more compensation for reduction in the Central Sales Tax (CST), states were told that the Centre was open to the idea, but all would depend on the fiscal situation, sources said.
The two committees - one on the CST compensation issue and the other on the design of the GST - will submit reports to the Centre on January 21.
After the meeting, Bihar Finance Minister and Chairman of Empowered Committee of State Finance Ministers Sushil Kumar Modi said all the states demanded compensation for reduction in the CST to two per cent from the earlier four per cent.