FM faces tightrope walk on tax, fis­cal tar­gets

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - From p1

“The govern­ment is also likely to have some buf­fer from capex in the fourth quar­ter, which as per re­vised es­ti­mates and first nine months’ ex­pen­di­ture is es­ti­mated at Rs 1.05 lakh crore,” Pant added.

Apart from these, the govern­ment will also need to achieve the dis­in­vest­ment goal of Rs 80,000 crore to meet the fis­cal deficit tar­get. So far, it has raised only Rs 35,100 crore from as­set sale in the cur­rent year.

There are ap­pre­hen­sions that the slip­page on fis­cal deficit could be more than the re­vised fig­ure of 3.4% for the cur­rent year, con­sid­er­ing that the govern­ment may have over­es­ti­mated the tax rev­enue growth for 2018-19.

How­ever, the govern­ment finds it quite achiev­able. Fi­nance sec­re­tary Ajay Narayan Jha told DNA Money that there could be fur­ther im­prove­ment in the rev­enues, given the growth in the di­rect tax col­lec­tion. The indi­rect tax rev­enue tar­get, too, looks achiev­able as the ex­pec­ta­tions are based on the over­all growth in the econ­omy, he said.

“Our first year av­er­age GST col­lec­tion was around Rs 85,000-90,000 crore range. This year, this is around Rs 97,000 crore. And this should also be seen in the con­text large con­ces­sions and a num­ber of rate ad­just­ments that were done over the course of the year. But the last year’s col­lec­tion, which is the De­cem­ber col­lec­tion re­flected in Jan­uary, raises the ex­pec­ta­tions that the GST may im­prove as we go along,” he said.

On fis­cal con­sol­i­da­tion front, he feels that the govern­ment will be on track to meet the com­mit­ment of achiev­ing 3% fis­cal deficit tar­get by FY21. “This year if you dis­count the spe­cial pack­age for the farm­ers, we have achieved 3.3% in 2018-19 and be­low 3.1% in 2019-20,” he said, adding that this should be seen in the con­text of cur­rent growth.

“There is a slightly bet­ter buoy­ancy in tax­a­tion be­cause of com­pli­ance, and there is also a greater for­mal­i­sa­tion of the econ­omy. Then, there is also a prospect of GST col­lec­tions sta­bil­is­ing and im­prov­ing,” he said.

From p1

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