The union finance ministry is likely to effect yet another hike in excise duty on petrol and diesel before March with a view to raising more revenue to meet the fiscal deficit target of 3.9 per cent of the GDP, reports said on Friday.
The ministry is also insisting on higher dividends from the PSUs in a bid to garner more non-tax revenue.
"Fiscal deficit target of 3.9 per cent for the current fiscal is sacrosanct and various options are available before the government, including further raising excise duty on petrol and diesel," a Zee News report quoted official sources as saying.
Last week, the government hiked excise duty on petrol by Rs0.37 per litre and by Rs2 a litre on diesel to mop up a little less than Rs4,400 crore. It has already raised excise duty on petrol and diesel, thrice over the past few months to raise an additional Rs10,000 crore in the current fiscal. Another hike would help the government to partly bridge the shortfall in direct tax collections and disinvestment receipts.
"If global crude oil price provide room for further duty hike, it can be done. The government is open to idea as it will help boost revenue," sources said.
Oil prices have already hit a 12-year low of $32 per barrel on concerns of weak demand following the stock market meltdown in China.
As things stand, finance ministry officials expect a shortfall of around Rs50,000 crore in disinvestment proceeds and about Rs30,000-40,000 crore in direct taxes, although higher realisation from indirect taxes as well as non-tax revenues will make up for part of the deficit.
Higher realisation from excise duty hike and higher dividend payout by public sector units will help the government maintain fiscal deficit at 3.9 per cent of GDP in the current financial year ending March 2016.
Although the government has targeted to raise Rs69,500 crore from PSU disinvestment in current fiscal, so far only Rs12,700 crore has been raised and the prospects of any major stake sale in the remaining three months of 2015-16 is also bleak.
Official data showed a marked improvement in the government's fiscal deficit position at the end of November 2015, which stood at Rs4,83,000 crore, or 87 per cent of the Budget Estimate (BE) for the whole 2015-16. This fiscal situation, however, is better than last year's when the deficit was 98.9 per cent of the BE for the same period.