We are keeping a very close watch on the U.S. Fed’s decisions and global inflationary pressures: Nirmala Sitharaman
The government will take up the inclusion of Aviation Turbine Fuel (ATF) in the Goods and Services Tax (GST) system before the GST Council, Finance Minister Nirmala Sitharaman said on Sunday, noting that high global fuel prices are a cause for concern.
Ms. Sitharaman was responding to a plea from Spicejet chairman Ajay Singh to lower the excise duty on fuel at least temporarily, as global crude oil prices are hovering around $90 per barrel, and pursue the inclusion of ATF in the GST regime.
“Of course, just not for airlines, but the global price of fuel is now a concern for all of us. More so for airlines because it [the sector] has not yet picked up from the pandemic,” the Minister said in a post-Budget interaction hosted by industry body Assocham.
Noting that the Omicron variant of COVID-19 occurred just as the civil aviation sector was on the cusp of a revival with tourists travelling across destinations, Ms. Sitharaman said that States have since brought back restrictions on domestic travel, and global travel too is affected by quarantine norms, hitting the sector.
The decision to include ATF in GST, she pointed out, was not hers alone to make. “It is for the GST Council [to decide]. The next time we meet at the Council, I will put it on the table for them to discuss it,“ she said, adding that she will also discuss the aviation sector’s concerns with banks.
Ready for ‘taper tantrum’
“The revival of the economy is very clear… it may not be equal everywhere across the board, but yet it is observable. I would call upon Indian industry to ensure that we don’t miss the bus this time,” the Minister said at an interaction with the Federation of Indian Chambers of Commerce and Industry (FICCI), adding that the country had missed out when the “taper tantrum” after the global financial crisis was mishandled by the previous government. By contrast, the Minister said the Central bank and the government are on top of the situation this time.
“We will be able to confidently say that we are fairly watchful of what is happening as regards the global strategic developments, the U.S. Fed’s decisions and also the global inflationary pressures. We are keeping a very close watch. And I can assure the leadership here that we shall not allow the Indian economy to suffer for want of preparations,” she asserted, adding that lessons had been learnt from mistakes of the previous crisis.
“Post the global financial crisis, the way in which for whatever reasons — I am not getting into a slugfest on whether that was right or wrong — but indeed the outcome showed that an opportunity was missed in that the measures that were taken [at] that time to ensure that liquidity was available, and the tap was not shut at the proper time,” she recalled.
“As a result, India became one of the fragile five economies. The taper tantrum wasn’t absolutely well-addressed at all. We missed out on one big opportunity that was available at the time,” she concluded.