Government initiates steps to meet budget targets
With an economic slow down looming large, the government is lining up measures to enable it to stick to its budget numbers and has asked ministries to refrain from new schemes, and stick to their approved spending plans and make sure that the projected revenues from oil and gas acreage and telecoms spectrum keep tricking in.
A host of government officials that over last few days said times news work that the issue of fiscal deficit is being monitored from the top echelons and every effort was being made to ensure that the tax collections targets, the planned dis investment of Rs 40,000 crore and spending plans are strictly adhered. Though oil prices are rising, officials said that the additional subsidy of nearly Rs 20,000 crore was possible given that there was more head room available in the budget. Unlike in the past, this year the government had provided Rs 23,640 crore in the budget to meet oil subsidy for this year. Though a bulk of this was used to clear the dues for fourth quarter, the government could generate Rs 20,000 crore by way of savings from some ministries to meet the requirement for first three quarters ( April-December) . For fourth quarters of current fiscal, the provision would be made in budget for 2011-2012 an official said. A similar strategy would be adopted for fertilizer subsidy. “ if there is need, we will resort to slashing spending under some heads” said a top finance ministry official.
In case of taxes, especially indirect taxes, despite the slow down in growth, the government does not expect overall collections to be hit as it is only real growth ( which is net of inflation) which would be effected, in high inflation environment. The nominal growth rates remains high. “ Besides, with commodity prices, especially oil, remaining high customs duty collection would remain robust. In any case there are few signs of slowdown in collections at the movement “ another official said.
Officials further said that the gross tax revenue is projected to rise 18.4 % which is much lower than historical average of over 25 % in pre -crisis phase.
With an economic slow down looming large, the government is lining up measures to enable it to stick to its budget numbers and has asked ministries to refrain from new schemes, and stick to their approved spending plans and make sure that the projected revenues from oil and gas acreage and telecoms spectrum keep tricking in.
A host of government officials that over last few days said times news work that the issue of fiscal deficit is being monitored from the top echelons and every effort was being made to ensure that the tax collections targets, the planned dis investment of Rs 40,000 crore and spending plans are strictly adhered. Though oil prices are rising, officials said that the additional subsidy of nearly Rs 20,000 crore was possible given that there was more head room available in the budget. Unlike in the past, this year the government had provided Rs 23,640 crore in the budget to meet oil subsidy for this year. Though a bulk of this was used to clear the dues for fourth quarter, the government could generate Rs 20,000 crore by way of savings from some ministries to meet the requirement for first three quarters ( April-December) . For fourth quarters of current fiscal, the provision would be made in budget for 2011-2012 an official said. A similar strategy would be adopted for fertilizer subsidy. “ if there is need, we will resort to slashing spending under some heads” said a top finance ministry official.
In case of taxes, especially indirect taxes, despite the slow down in growth, the government does not expect overall collections to be hit as it is only real growth ( which is net of inflation) which would be effected, in high inflation environment. The nominal growth rates remains high. “ Besides, with commodity prices, especially oil, remaining high customs duty collection would remain robust. In any case there are few signs of slowdown in collections at the movement “ another official said.
Officials further said that the gross tax revenue is projected to rise 18.4 % which is much lower than historical average of over 25 % in pre -crisis phase.
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