Confident of meeting FY18 fiscal deficit target, says Finance Secretary Hasmukh Adhia

Amid uncertainty in revenue collection owing to the implementation of Goods and Services Tax (GST), India is very much in course to meet the fiscal deficit target of 3.5 per cent of GDP for 2017-18, Finance Secretary Hasmukh Adhia said on Monday.

“We are absolutely confident that we are meeting the fiscal deficit target of this year (2017-18),” Adhia said.

Fiscal deficit is a measure of how much the government borrows in a year to meet part of its spending needs.

Adhia further explained that exceeding the budgeted target for direct tax collection, certain 'off-budget funding of projects’, as well as no major expenditure cut is an indication of the path towards meeting the target.

“With almost all of revenues and expenditure accounted for (some minor accounting adjustments remaining), I can confirm that both fiscal deficit and revenue deficit are lower than the revised estimates for 2017-18,” Economic Affairs Secretary Subhash Chandra Garg tweeted.

At the end of February, India’s fiscal deficit ballooned to 120 per cent of the revised full year target of 2017-18 at Rs 7.15 lakh crore. The data for March is awaited.

However, the provisional direct tax collection numbers show that net collection was Rs 9.95 lakh crore, up 17.1 per cent on-year.

“The net direct tax collections represent 101.5 per cent of the budget estimates (Rs 9.8 lakh cr) and 99 per cent of the revised estimates (Rs 10.05 lakh cr) of direct taxes for 2017-18,” the finance ministry said in a statement.

Adhia said that direct tax collection figures is expected as some payments were not cleared as banks were shut.

Chairman of Central Board of Direct Tax (CBDT) Sushil Chandra said that net collection for corporate income tax grew 17.1 per cent, while personal income tax grew 18.9 per cent.