New Delhi: As the 2019 fiscal draws to an end, the government on Monday reiterated that the fiscal deficit and liquidity positions are well under control.
“Liquidity situation comfortable; confident of meeting the fiscal targets”, said Subhash Chandra Garg, secretary, Department of Economic Affairs, on the sideline of an event in the national capital.
Garg’s statement comes amid concerns over both direct and indirect taxes, particularly GST revenues, not inching up the targets set for them.
While Garg had stated earlier that government may just touch the revised direct tax target, indirect taxes may witness a shortfall. However, Ministry sources said both taxes are heading towards deficits of Rs 70,000 crore and Rs 50,000 crore respectively. The only saving grace is government somehow has managed to exceed the disinvestment target by collecting Rs 85,000 crore.
The Finance Minister has said that the fiscal deficit for FY20 would have been 3.1 per cent without the allocation of Rs 75,000 crore for income support for farmers under the PM Kisan Yojana.
The total Goods and Services Tax collection in the current fiscal till February is Rs 10.70 lakh crore. The government has lowered the GST collection target for the current fiscal to Rs 11.47 lakh crore in the revised estimates, from Rs 13.71 lakh crore.
The GST collection for the 2019-20 fiscal has been budgeted at Rs 13.71 lakh crore. The government’s mop-up target for direct tax collection during the current fiscal as per the upward revised estimate is pegged at Rs 12 lakh crore.
“Fiscal deficit target would be met as a shortfall in indirect tax collection would be compensated by lower government expenditure,” Garg had earlier said.
“The fiscal deficit target of 3.4% of GDP will be met…Any additional outgo on account of subsidies, be it food, oil or feriliser and extra payout, will be met through budgetary resources and there may be some pushover to the next fiscal, but these are are not major,” a source said.
The yields on the benchmark 10-year bond is still tracking at 7.4 per cent indicating the market also sees fiscal control.
Sources said the Finance Ministry had asked the financial advisors of various ministries to stick to their budgeted expenditure estimates and not seek any additional allocations. Subsequently, North Block had advised a cut in non-essential non-Plan expenditure for all ministries and departments.
–IANS
Government has failed fiscal consolidation test: Chidambaram
