Increase social security pension in Budget 2018: Economists to Jaitley

Union Minister for Finance and Corporate Affairs, Arun Jaitley chairing a pre-Budget consultative meeting with the leading economicsts
Economists today suggested a range of measures, including increasing social security pension, to Finance Minister Arun Jaitley as part of pre- budget consultations.

"The amount (for social security pension) has been Rs 200 per month. This is totally unacceptable. There is no reason to keep it so low. So, make it at least Rs 500, I would say even Rs 1,000, if possible and increase the coverage," noted economist Jean Dreze said after the meeting here.

Asked if social security pension is raised it would result in stress on fiscal deficit, he said, "this is peanuts. This is nothing".

He also suggested full-fledged implementation of maternity entitlements. This has been pending for four years.

Former Chief Economic Adviser Arvind Virmani said the government should carry out customs and exim duty reform as the sector has not seen reforms for 10 years.

According to Rathin Roy, member Economic Advisory Council to the Prime Minister, the government is expected to stick to fiscal deficit target.

"I think there is a political commitment (to do this). I reinforced that. I am sure they will. I said that we understand that there is a genuine commitment to maintain the fiscal deficit and revenue deficit targets. Operational constraints may vary but political commitment is there," Roy said.

Besides, some economist also recommended imposition of long term capital gains tax on equity, sources said, adding interest rate also figured during the meeting along with rural distress and job creation.

Even the Reserve Bank of India at several occasion has asked banks to pass on the rate cut quickly through the repo rate reduction to consumers but banks are reluctant to do so for some reason or other.

Besides Jaitley, the meeting was also attended by top finance ministry officials, including Finance Secretary Hasmukh Adhia, Chief Economic Adviser Arvind Subramanian, Expenditure Secretary A N Jha and Financial Services Secretary Rajiv Kumar.

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