Government to stick to fiscal deficit target of 4.6 per cent

Finance minister Pranab Mukherjee says the  government would stick to the fiscal deficit target of 4.6 per cent of GDP for 2011-12 despite huge revenue sacrifice from the duty cut on petroleum products.

Mukherjee replied in the negative when reporters asked him whether revenue forgone due to slashing excise and customs duties on petroleum products would impact fiscal deficit target. He said he did not think so as government was still trying to keep the target.

However, according to Mukherjee, the fiscal deficit would ultimately depend on the final analysis based on revenue receipt and expenditure. He added though that at the moment there was no need to rush to any conclusion.

While raising the prices of diesel, kerosene and cooking gas in June, the government had also slashed the duties. The cuts would have meant the government foregoing Rs49,000 crore annually.

However, as the rate cuts would take effect for the remaining three quarters only, the total loss would be to the tune of Rs35,000-Rs36,000 crore, including share of states.

Earlier, the government had expressed concern over falling revenue collection, of both direct and indirect taxes due to volatility in global commodity prices and persistently high inflation.