Indian government may not meet its fiscal deficit target because of lower tax collections: India Ratings
- For the third straight year, the Indian government’s fiscal deficit is likely to be 3.5% of GDP instead of 3.3%, ratings agency India Ratings & Research has predicted.
- As per the calculations by the research firm, the fiscal deficit may breach the budgeted target of ₹6.24 trillion
- According to India Ratings, the country’s GST tax collection for the first half of
FY19stood at 4.3% against its budgeted growth of 22.2% for FY19.
As per the calculations by India Ratings, India’ fiscal deficit is likely to be ₹399 billion more than what was targeted by India’s
This will be the third consecutive year when India’s fiscal deficit will be 3.5% of GDP, noted the report.
The agency anticipates a tax revenue shortfall of ₹224 billion primarily because of the shortfall in proceeds from direct and indirect tax collection. Despite the government’s efforts to prevent revenue leakage in GST, tax collection only rose 4.3% during the first half of FY19, much lower than the budgeted growth of 22.2% for FY19.
Additionally, the government is also likely to miss its disinvestment target due to lower receipts. As of October, total disinvestment receipts were nearly ₹152 billion against the budgeted receipt amount of ₹800 billion. Even though the central government may expect a pick up in disinvestment in December but it will not be enough to make up for the shortfall, said India Ratings.
Revenue Expenditure growth, which was also slightly lower than the target in the first half of FY19 is now expected to boost mainly because of a surge in the minimum support prices of kharif crops and the implementation of the government’s Ayushman Bharat program for bringing affordable insurance for Indian masses.
India’s securities regulator wants to develop India’s corporate bond market — so it has ordered large companies to raise at least 25% of their long-term debt from bond sales
After weeks of tension, the Reserve Bank of India gives in to some of the central government's demands while retaining its independence
AdvertisementModi administration is so confident about its re-election chances that it’s reportedly releasing a full budget for the next financial year
Popular on BI
- India's income inequality is so bad that's weighing down the avg in both South Asia and SouthEast Asia
- Meet the Indian-origin women CEOs who are leading the way for major global companies
- SuperRare NFT sells for more than $2 million — a 20,000-fold increase in value over three years
- Microsoft to skill 1 lakh Indians in cybersecurity by 2022
- Love procrastinating? It can help you earn Rs 1 lakh by applying for Chief Excuse Officer at Cultbike.fit