The Union Finance ministry fears a shortfall in the revenue collection for this fiscal, even as they once again reiterated the hope of a better GDP. In a press conference addressed by the Finance Ministry secretaries and Chief Economic Adviser Arvind Subramanian, the officials admitted that revenue collection will fall short by Rs 50,000 crore lower than the expected targeted but expressed confidence that that economic growth will exceed 7.5 per cent. The officials also claimed that the fiscal deficit will remain within the budgeted target.
“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,” Finance Secretary Ratan Watal said.
While, Economic Affairs Secretary Shaktikanta Das said that the GDP growth this fiscal is expected to exceed 7.5 per cent, Revenue Secretary Hasmukh Adhia added that the revenue collection will “fall short of the budgetary target by 5-7 per cent”, mainly because of subdued growth 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.
In between, Finance Secretary Watal also expressed confidence that government and RBI will work to “consolidate the gains achieved in inflation control, through the inflation targeting framework and the associated institutional arrangements.”
The retail inflation, based on the Consumer Price Index (CPI) is within the target zone, while the Wholesale Price Index (WPI) based inflation has been negative for 10 months in a row with core inflation showing signs of moderation, the Finance Secretary added.
Meanwhile, Revenue Secretary Hasmukh Adhia termed the growth of 36.5 per cent in indirect taxes as “quite satisfactory”, adding there is “likely to be some shortfall in direct taxes when we end up the year, but some part of it will be made good by indirect taxes because of the additional resource mobilisation measures”. Mr. Adhia also claimed that that growth in indirect taxes was a reflection of increasing demand and economic activity.
“Goods are being sold, goods are being consumed, they are being imported, people are paying excise on it, the service tax is also showing some kind of buoyancy. So all this is looking good,” the Revenue Secretary said.
Talking about the annual budget 2016-17, Ratan Watal said the Union Finance Ministry has started preparatory work on 2016-17 budget two months ahead of the schedule with a view to firm up of policies for expediting necessary structural reforms to boost economy.
(With inputs from the PTI)