Fis­cal Deficit Tar­get of 3.2% Re­al­is­tic, Rev­enues to Im­prove: Shak­tikanta Das

The Economic Times - - Economy: Macro, Micro & More - Press Trust of In­dia

New Delhi: Re­ject­ing ar­gu­ments that fis­cal deficit tar­get of 3.2% is op­ti­mistic, eco­nomic af­fairs sec­re­tary Shak­tikanta Das said it is re­al­is­tic and there is all pos­si­bil­ity that rev­enues will ex­ceed the tar­get as Bud­get has not taken into ac­count the de­mon­eti­sa­tion wind­fall.

“Rev­enue, if at all, can ex­ceed be­cause peo­ple are point­ing out that you have not taken into ac­count wind­fall you will get from RBI be­cause of de­mon­eti­sa­tion,” he said in an in­ter­view.

Be­sides, he said, there would be col­lec­tion taxes next fis­cal from those who fail to avail Pradhan Mantri Garib Kalyan Yo­jana (PMGKY). “Ex­cess cash which has come into the bank­ing sys­tem, in­come tax depart­ment has al­ready an­a­lysed those data and there are large num­ber of bank ac­counts where de­posits made are to­tally dis­pro­por­tion­ate to the in­come of the in­di­vid­u­als. It does not tally with their in­come tax re­turns. “So it is far in ex­cess of what in­come tax re­turns re­flect for the pre­vi­ous years. So there is a strong po­ten­tial in those cases to get ad­di­tional rev­enue. In such cases, the peo­ple have an op­por­tu­nity to come and de­clare un­der PMGKY,” he said.

If such in­di­vid­u­als don't de­clare, then the in­come tax depart­ment will pur­sue those cases next year and get the rev­enues, he said. “There­fore, ...rev­enue will be bet­ter next year”.

Talk­ing about con­ser­va­tive es­ti­mate for in­di­rect taxes, Das said a growth of only 8.8% has as­sumed be­cause goods and ser­vices tax (GST) is be­ing in­tro­duced. The gov­ern­ment in­tends to in­tro­duce GST, a com­pre­hen­sive in­di­rect tax re­form, from July 1.

“So, there­fore we want to be very care­ful, we didn't want to over-project in case of in­di­rect taxes be­cause GST is com­pletely new tax­a­tion sys­tem. Al­though the ex­pec­ta­tion is that it will be rev­enue neu­tral but keep­ing that in mind we have been very care­ful and as­sumed 8.8% growth,” he said. While the CGST will sub­sume cen­tral taxes of ex­cise, cen­tral sales tax and ser­vice tax, IGST is to be charged on move­ment of goods and ser­vices from one state to an­other.

States will also have to pass SGST or State Goods and Ser­vice Tax. Also, a GST Com­pen­sa­tion Act needs to be ap­proved by Par­lia­ment to pro­vide for com­pen­sa­tion to states that lose rev­enue from im­ple­men­ta­tion of GST in first five years. While the GST Coun­cil has al­ready de­cided on a four-slab tax struc­ture for the in­di­rect tax regime, the levy for dif­fer­ent goods and ser­vices will be de­cided by May or June. The Coun­cil has fixed the four-tier struc­ture of 5%, 12%, 18% and 28%.

...there would be col­lec­tion taxes next fis­cal from those who fail to avail PMGKY, Das said

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