Govt set to meet fiscal targets with a surge in indirect tax mop-up

With indirect tax collections for the current fiscal (till February) beating the revised estimates at Rs7.09 lakh crore, the government is set to meet its fiscal deficit target of 3.9 per cent of gross domestic product for 2015-16 (it ended on Thursday), the finance ministry stated on Friday.

As per the revised estimates, Rs7.52 lakh crore was to come from direct taxes (corporate and income tax) and another Rs7.03 lakh crore from indirect taxes (customs, excise and service tax), the ministry said, adding that the 2015-16 revised targets were expected to be fully met.

The government had revised upwards its target for indirect tax collections by 8.6 per cent for 2015-16, but actual collections have crossed the revised estimate of Rs7.09 lakh crore as per provisional estimates.

''We have surpassed revised estimates in each of the three indirect taxes – customs, excise and service tax. The government has collected Rs7.09 lakh crore against revised estimate of Rs7.04 lakh crore for 2015-16,'' CBEC chairman Najib Shah said.

For April-February, direct tax revenue collections stood at around Rs5.54 lakh crore, around Rs1.98 lakh crore short of the revised FY16 target.

The revised estimates announced in Budget 2016-17 pegged disinvestment receipts from minority stake sale in public sector units at Rs25,312 crore, as against the target of Rs41,000 crore. (The earlier total target, including strategic sales, was Rs69,500 crore.)

Plan expenditure for 2015-16 is expected to be Rs4,70,000 crore, achieving the revised estimate. The statement said this was higher than the budget estimate of 2015-16 and the actual plan expenditure in 2014-15, of Rs4,65,277 crore and Rs4,62,644 crore, respectively.

In contrast, direct tax revenue collections stood at around Rs5.54 lakh crore, around Rs1.98 lakh crore short of the revised FY16 target of Rs7.52 lakh crore.
 
According to the data released for April-February, total tax revenue for the first eleven months of FY16 stood at Rs7,35,778 as against the revised estimate of Rs9,47,508 crore.

The finance ministry, however, said it expects to be within its fiscal deficit target of 3.9 per cent of the GDP for 2015-16. The ministry said initial estimates showed it has achieved all other fiscal targets, including those for tax revenue and disinvestment, adding that the government remains committed to the path of fiscal consolidation.

This ''demonstrates prudent fiscal management'', economic affairs secretary Shaktikanta Das tweeted after issuing a statement.