New Delhi, July 5 (IANS) The government on Friday lowered the fiscal deficit target for 2019-20 to 3.3 per cent of the gross domestic product in the Union Budget.
The government has also laid out an aggressive disinvestment programme to augment non-tax revenue collections. The net receipts in indirect taxes is Rs 25,000 crore while the direct taxes additional revenue would be up to Rs 8,000 crore, Revenue Secretary A.B. Pandey said at a media conference.
He further added that the increase in surcharge on high networth individuals from Rs 2 crore to Rs 5 crores will yield Rs 12,000 crore to the government.
"Fiscal deficit is lowered to 3.3 per cent (from earlier 3.4 per cent)," Finance Minister Nirmala Sitharaman said at the end of her Budget speech keeping the suspense till the end.
"FY21 and FY 22 fiscal deficit targets retained at 3 per cent," said at the media interaction. Fiscal deficit touched 52 per cent of the budget estimate for the full year in the first two months of 2019-20.
The FY20 gross tax revenue target is at Rs 24.6 lakh crore while net tax revenue target is Rs 16.49 lakh crore. The FY20 non-tax revenue target is at Rs 3.13 lakh crore and net short term borrowing target is Rs 25,000 crore.
The Centre has set FY20 GST collection target at Rs 6.6 lakh crore. In the last financial year, GST collections by the Centre missed the budgeted target by Rs 1 lakh crore.
Sitharaman pegged the Goods & Services Tax (GST) collection in the Union Budget at Rs 6.63 lakh crore for FY20, up from last year's revised collections of Rs 6.43 lakh crore.
The total mop-up from the indirect taxes was pegged at over Rs 7.61 lakh crore for 2019-20 in the interim budget presented in February.
The interim budget for 2019-20, also presented by the Modi government in February, had forecast a fiscal deficit of 3.4 per cent of GDP in 2019-20 while revising the fiscal deficit upwards for 2018-19 to 3.4 per cent from 3.3 per cent.
The slowdown in growth has adversely impacted tax collections making it even more difficult for the government to find funds for its social sector schemes and capital expenditure.
While direct tax collections were 6 per cent lower than the revised estimates, indirect tax collections were down 10 per cent than even the revised lower tax projections.
However, there were fears that an increase in the fiscal deficit and subsequently government borrowings is likely to push up interest rates thus raising fears of 'crowding out' private investment at a time when the sector is reluctant to invest.
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