Direct tax mop-up to miss target, but economy remains strong: FinMin
November, 02nd 2015
The Finance Ministry on Monday said that direct tax collections will fall short of target this fiscal largely due to sluggish growth in corporate taxes collections. But the Centre may come close to meeting the overall revenue projections of ?14.5-lakh crore, thanks to the buoyancy seen on the indirect taxes front.
Indirect taxes are growing at a healthy 37 per cent. Hasmukh Adhia, Revenue Secretary in the Finance Ministry, said as against the budgeted revenue target of ? 14.5-lakh crore, the Centre is likely to close the current fiscal with receipts of about ?14-lakh crore.
Addressing a first-of-its-kind press conference where all the top Secretaries to the Finance Ministry and the Chief Economic Advisor were present, Finance Secretary Ratan Watal said India’s macro fundamentals remain strong and that the country was now better placed to handle external shocks.
The country’s gross domestic product (GDP) is expected to exceed 7.5 per cent and the government is committed to keeping the fiscal deficit within the budgeted target, said Shaktikanta Das, Secretary, Department of Economic Affairs.
This growth projection is lower than the 8-8.5 per cent forecast made in the Economic Survey for 2015-16 earlier this year. Asked if the Ministry was abandoning the earlier specified growth forecast of 8-8.5 per cent (in the Survey) to a more realistic level of above 7.5 per cent, Arvind Subramanian, Chief Economic Advisor, said: “We will wait for the second quarter GDP data before taking any formal view on altering growth forecast.” On disinvestment, Shaktikanta Das said that Finance Minister Arun Jaitley had last week reviewed the progress made so far. “An internal strategy has been discussed and the government is committed to maximise the disinvestment receipts for the current fiscal,” he said. Das declined to get into the specifics of the internal strategy, but asserted that effort would be to maximise the overall disinvestment receipts.
The Ministry revised the total value of declarations made under the one-time compliance window in the black money law to ?4,147 crore, from the earlier ?3,770 crore. Asked if the Ministry saw the response to the compliance window as “lukewarm”, Adhia said the Government had not set any target on this count and hence the question of the response being lukewarm or below expectations did not arise. To a query on what was the actual amount that the exchequer could realise from the assessments completed on the illegal money parked overseas in HSBC Bank Geneva, he said that tax demand of ?4,562 crore has been raised on the illegal money stashed in the bank.
On the Seventh Pay Commission recommendations expected in December, Watal said that it would be implemented from January 1 next year.