October 6, 2015 1:19:19 am
The government on Monday said that though revenue collection is expected to fall short by 5-7 per cent of the budgeted target, fiscal deficit target would be met and the economy will grow over 7.5 per cent during the current financial year.
“There is likely to be some shortfall of 5-7 per cent in direct taxes. The total tax revenues are likely to be around Rs 14 lakh crore in the current fiscal, as against the budget estimate of Rs 14.5 lakh crore,” revenue secretary Hasmukh Adhia said. He however added that the shortfall in the direct tax collection would be made good by the indirect tax collection, which has seen a robust growth of 36.5 per cent between April-August.
Further, amid indications that despite the government’s efforts towards maximising mop up, the disinvestment target of Rs 69,500 crore is unlikely to be met, economic secretary Shaktikanta Das exuded confidence that the economic growth will “exceed 7.5 per cent in 2015-16”. He added that in the last one and a half year, the government has taken a lot of decisions, which should have positive effect on the economy. Also, low inflation and commodity prices are likely to given an opportunity to the government to take policy decisions.
Echoing the sentiments, finance secretary Ratan Watal said, “Our macro-fundamentals remain strong. We are now better placed to handle unforeseen external shocks and to put India firmly on the path of economic recovery and inclusive prosperity”. He said that the while government is on course to achieve the 3.9 per cent fiscal deficit target pegged in the Budget, it is working with the Reserve Bank of India to “consolidate the gains achieved in inflation control, through the inflation targeting framework and the associated institutional arrangements.”
To support the economy, Watal said that the RBI has already announced a 50 basis points cut in the policy rate, bringing cumulative support of monetary policy to 125 basis points this year. “This should boost confidence and investment, and help shore up corporate balance sheets. The government will play its part to ensure the benefits of accommodative monetary policy are transmitted to the economy at large,” he added.
With regards to expenditure management, Watal, who is also expenditure secretary, said that despite doubts being expressed by experts, government has been able to allocate 10 per cent more resources to the states and increase plan expenditure by 30 per cent so far in the current fiscal while adhering to the fiscal glide path.
The government will move ahead with its subsidy rationalisation programme and is awaiting suggestions of the report of expenditure management commission to take more initiatives. Headed by former RBI governor Bimal Jalan, the commission is expected to submit its report by December end.
The government as such has already initiated the exercise for budget 2016-17 two months in advance to ensure structural reforms on the expenditure side can be completed in time for the Budget.
Meanwhile, the government on Monday increased import duty on ghee, butter and butter oil by 10 per cent to 40 per cent and promised to take more such actions to safeguard the interest of domestic producers in wake of a glut in the global commodity markets. The decision was taken based on the request from milk producers seeking duty protection.
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