The government admitted on Monday that tax collection may fall 5-7 per cent (around Rs 50,000 crore) short of the Budget target, but expressed confidence that the economy will clock more than 7.5 per cent growth this fiscal.
At a press conference held on completion of first half of this fiscal here, finance secretary Ratan Watal said that the government will continue with the reforms agenda to achieve the potential growth of eight per cent plus over time.
The twin deficits-fiscal and current account-have been reduced, Watal said, adding that the government is committed to achieving this year's fiscal deficit target as well as the fiscal glide path laid out in the Budget. He further said that the government is trying hard to sort out legacy issues of tax demands raised retrospectively through mutually beneficial solutions.
One of the concerns is revenue collections, which according to revenue secretary Hasmukh Adhia will fall short mainly because of subdued growth in direct taxes. Total tax revenues are likely to be around Rs 14 lakh crore in this fiscal as against the Budget estimate of Rs 14.5 lakh crore, he said. The government had set an ambitious 16.5-per cent growth target for revenue collection during this current fiscal.
Adhia said that there is likely to be some shortfall in direct taxes when "we end the year, but some part of it will be made good by indirect taxes because of the additional resource mobilisation measures".
On Swachh Bharat cess, Adhia said that the ministry has not yet decided on services where this two per cent cess will be levied. Resources generated from this cess will be utilised for financing and promoting initiatives towards Swachh Bharat.
Economic affairs secretary Shaktikanta Das said that there are indications that economic growth will exceed 7.5 per cent in the current financial year.
"Despite the global slowdown and declining export demand, India has emerged as the fastest-growing major economy in the world," he added.
Das also said that interests of small savers, senior citizens and the girl child scheme will be taken into account in the working out of new interest rates for small savings such as Postal savings and PPF. The social security component of small savings schemes is very important and the government will keep that in mind, he said.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today