Published: Sun, September 16, 2018
Finance | By Loren Pratt

Centre to ‘strictly’ maintain fiscal deficit at 3.3%: Arun Jaitley

Centre to ‘strictly’ maintain fiscal deficit at 3.3%: Arun Jaitley

The FM said inflation was broadly under control and said the government was confident of achieving a higher growth rate than what has been projected in the budget for 2018-19. The fuel hike has led petrol touching a record high of Rs 81.63 per litre and diesel to Rs 73.54 a litre.

"The government is confident and will strictly maintain the 3.3% fiscal deficit target", Jaitley said.

It feels that the country can not afford to have a twin deficit problem - a depreciating rupee and high crude import bill putting pressure on the country's current account deficit (CAD), and a fiscal slippage.

On the tax collection front, Jaitley said that the direct tax collection is moving ahead of schedule as the impact of the anti-black money measures by the government and demonetisation has had a positive impact. The tax cuts were effective from 27 July.

Jaitley said the income tax collections have been robust with expanding the base and collections will exceed budgetary targets.

"The CBDT is very clear that this year they will be able to collect in excess of budgeted target", he said. The government has set a target of raising Rs 80,000 crore from disinvestment in state run companies in the current financial year.

Jaitley's confidence of meeting gross tax revenue target of Rs 22.7 trillion this fiscal, a 17% jump from what was collected in FY18, stems from a strong growth trend in income tax receipts, the anti-evasion measures taken in the GST regime and expectations of higher consumption of consumer goods driven by GST rate cuts that came into force towards the end of July.

Asked if fuel prices and duty cuts were discussed, he said the meeting today was internal review meeting. On top of this, states levy Value Added Tax (VAT). Speaking on the important decisions taken during the meeting, Union Minister said, "The mandatory hedging conditions for infrastructure loans will be reviewed". However, "there are some issues on which immediate action is needed", the minister said while announcing steps to increase inflow of foreign funds and check current account deficit.

"Government's five "measures" announced yesterday are half-hearted and too late".

Economic Affairs secretary Subhash Chandra Garg said, while it is hard to give a specific number, it should have an impact of $8-10 billion.

Briefing the media about the discussions held during the meeting with the Prime Minister, FM Jaitley said that PM was satisfied with the macroeconomic data. There is a phenomenal increase in the number of people filing tax returns and the quantum of advance tax being paid.

The Finance Minister further said that the government would restrict import of non-essential items and encourage exports.

The government had in Budget projected direct tax collection of Rs 11.5 lakh crore for 2018-19 fiscal.

"As far as non-tax revenues are concerned the entire programme of divestment and strategic sale for this was also considered".

On divestment, Jaitley expressed confidence that the just as previous year, the government is confident of not only meeting but may exceed the target of divestment.

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