With the fiscal deficit in the first two months touching about 55 per cent of the budget estimates for the year, the finance minister, Mr P Chidambaram, today expressed confidence that the government would contain the deficit below its budget estimates of 2.5 per cent of GDP for the year.
At the end of the year, we will do better than the budget estimates, Mr Chidambaram said when asked about the sharp rise in fiscal deficit in April-May as per the figures released by the Comptroller General of Accounts yesterday. The fiscal deficit for two months touched Rs 73,201 crore, 54.9 per cent of estimated fiscal deficit of Rs 1,33,287 crore for the fiscal, mainly on account of rising oil import bill.
Meanwhile, revenue deficit stood at Rs 67,731 crore, against the budget estimate of Rs 55,184 crore for the year. According to budget estimates, fiscal deficit is expected to come down to 2.5 per cent of gross domestic product (GDP) in the current fiscal year from 2.8 per cent in the previous year.
Earlier, at the diamond jubilee function of the Institute of Chartered Accountants of India (ICAI), Mr Chidambaram said tax-to-GDP ratio was expected to touch 13 per cent in 2008-09, compared to 9.2 per cent in 2003-04 and 12.8 per cent last fiscal. Stating that there was scope for larger revenue, he called for widening the tax base and simplification of the tax base.
Appreciating the contribution of national accounting body in tax reforms, he said those who violate tax laws would be prosecuted.