homeeconomy NewsSavings, public account funds to help govt meet deficit aim; FY19 tax revenue shortfall seen around Rs 60,000 crore
Savings, public account funds to help govt meet deficit aim; FY19 tax revenue shortfall seen around Rs 60,000 crore
Indirect taxes, other than customs, and corporate tax collections under direct taxes are expected to fall short by Rs 60,000 crore by March 31, sources told CNBC-TV18
The government is betting on expenditure savings and using the public account corpus to help remain on fiscal course in the fiscal year 2018-29, government sources told CNBC-TV18.
Tax revenues, particularly indirect taxes, are falling significantly short against their revised targets, the sources added. Indirect taxes, other than customs, and corporate tax collections under direct taxes are expected to fall short by Rs 60,000 crore by March 31—over 0.3 percent of the gross domestic product (GDP).
To prevent a fiscal slippage, the government may be looking at a 1.5 percent-2 percent worth of savings in the 24.57 lakh crore expenditure budget. Thereby, indicating close to Rs 50,000 crore coming through this route, if required.
The other buffer the government may bank on is by partially using some of the Small Savings funds and the unused GST Compensation Cess fund, both of which fall under the head of Public Accounts. Borrowings against small savings to meet public expenditure can take some of the fiscal pressure off as that is not counted in the fiscal deficit calculation. Also, the govt may decide to dip into the unused GST Compensation Cess kitty, just like it did at the time of the Budget where it used Rs 29,000 crore to bridge the fiscal gap.
The government had revised its fiscal deficit target to 3.4 percent from 3.3 percent in the revised estimates of FY19 on February 1.
Meanwhile, as the fiscal draws to a close and the government races against time to meet its deficit target, the RBI has issued instructions to all banks to remain open for govt business on March 30 and March 31, both of which are weekend days.
First Published: Mar 27, 2019 3:12 PM IST
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