Economy on Track?
- Govt confident of meeting the 3.9 percent fiscal deficit target for the current financial year
- Govt faces a likely shortfall of 5% in the gross tax revenue
- Finance ministry confident growth will exceed 7.5 percent in the current fiscal yea
- Finance Secretary says India better placed now to handle unforeseen external shocks
The government may be saddled with a revenue shortfall of around 5 percent in the current financial year but is confident of meeting the fiscal deficit target, senior officials in the finance ministry said on Monday.
Top secretaries of the finance ministry, led by finance secretary Ratan P Watal, addressed a joint news conference on Monday.
Revenue secretary Hasmukh Adhia said the tax target looks ambitious but hopes to achieve it. He, however, admitted that there could be “small shortfall.”
While indirect taxes collections have risen, up 36.5 percent including the impact of the additional revenue mobilisation measures such as new duties and levies, direct taxes have remained sluggish.
There is likely to be some shortfall in the direct taxes by the end of the year but some part of it will be made good by the indirect taxes and I am very hopeful that if there are no externalities we should be able to achieve our target. Out of the Rs 14.5 lakh crore target, we may reach 14 lakh crore this is the current estimates.
— Hasmukh Adhia, Revenue Secretary
The finance ministry had earlier said they may go slow on the divestment programme after markets turned volatile. The government aims to raise an ambitious Rs 69,500 crore from stake sale in public sector undertakings this financial year.
Economic affairs secretary Shaktikant Das said the market was changing from day to day but the government was committed to maximising revenues from stake sale. Watal said the government will aim for better expenditure management to achieve its fiscal goals.
From the expenditure point of view unlike last year we do not want to go in for any over rationalisation of what you may call expenditure cuts. We want to sustain whatever has been envisaged on the Plan of this year, both on the centrally sponsored schemes and the central sector schemes.
— Ratan P Watal, Finance Secretary
He also said the finance ministry was also anticipating the Expenditure Management Commission to come out with suggestions for better management of spending. “These figures we will look at and “I am confident that the 3.9 percent (fiscal deficit) target will be achieved”, said Watal. The finance ministry was also confident of robust growth and expects it to exceed 7.5 percent in the current fiscal year. The Economic Survey had assumed growth of 8-8.5 percent in the current year, while RBI estimates growth to be 7.4 percent slightly lower from its previous forecast of 7.6 percent. Watal said the country’s macroeconomic fundamentals remain strong and India better placed now to handle unforeseen external shocks.
Despite the global slowdown and declining export demand, India has emerged as the fastest growing major economy in the world. While the government continues to implement its reform agenda, the economy should over time realise its 8 percent plus growth potential.
— Ratan P Watal, Finance Secretary
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