12/3/2019 Meeting fiscal deficit target a Herculean task - Times of India https://timesofindia.indiatimes.com/business/india-business/meeting-fiscal-deficit-target-a-herculean-task/articleshow/72301698.cms 1/14 HI, Maitri Edit Profile My Times Redeem LOGOUT Open in app + English िही मराठी বাংলা ગુજરાતી ಕನ ಡ தழ் മലയാളം | Epaper| GadgetsNow 15 Notification Center Business Briefs World Business Sports Entertainment TV Life & Style Photos Education Politics Elections Business India Business International Business Sensex Photos Videos GST Budget 13 mins ago
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12/3/2019 Meeting fiscal deficit target a Herculean …...Ratan Tata Narayana Murthy Anil Ambani Meeting fiscal deficit target a Herculean task TNN | Updated: Nov 30, 2019, 12:24 IST
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12/3/2019 Meeting fiscal deficit target a Herculean task - Times of India
Although marginally better than the near 104% of BE reading at the end of October 2018, tax collectionswere a major area of concern as tax revenue rose just 1.2% during April-October 2019The economic slowdown, which is reflecting in lower imports, meant that customs duty collections fellover 15% in October 2019 to Rs 64,459 crore
(Representative image)NEW DELHI: The pressure to meet the fiscal deficit target for 2019-20 intensified further on Friday after latestdata estimated nominal GDP growth at 6.1% in the September quarter, pegging the first half number at a shadeover 7%.
This is much lower than the 12% nominal GDP growth (including inflation) budgeted by finance ministerNirmala Sitharaman, when she estimated the fiscal deficit for the current financial year at 3.3% of GDP.
While most people look at the real GDP growth (net of inflation) number, for policymakers in North Block andcentral bank officers, the nominal growth numbers are crucial since that is the base to calculate the fiscaldeficit.
"The lower growth in GDP will further strain government finances. It could result in the central governmentbreaching the fiscal deficit target of 3.3% of GDP for 2019-20," said Care Ratings chief economist MadanSabnavis, adding that fiscal deficit for the year could be in the range of 4.1-4.3% of GDP.
Already, finances are under strain with separate data released by the Controller General of Accounts on Fridayshowing that at Rs 7.2 lakh crore, fiscal deficit was 102.4% of the Budget estimate (BE) at the end of October.
Although marginally better than the near 104% of BE reading at the end of October 2018, tax collections werea major area of concern as tax revenue rose just 1.2% during April-October 2019.
The economic slowdown, which is reflecting in lower imports, meant that customs duty collections fell over15% in October 2019 to Rs 64,459 crore. It was already showing in the integrated GST collections, which havebeen declining for the past few months as companies were importing lower quantities of raw material andcapital goods used for production in factories.
12/3/2019 Meeting fiscal deficit target a Herculean task - Times of India
While the Rs 1.76-lakh-crore surplus transfer from the RBI and claims of higher than-budgeted disinvestmentreceipts may come to the government's rescue, even government officers are sceptical of the Centre meeting thedeficit target, without cutting down on expenditure.
Sitharaman has opted against commenting on numbers but has maintained that she will not wield the axe onmajor spending plans. The FM is currently reviewing the revised numbers shared by government departmentsin the run-up to the Budget, which is scheduled to be presented on February 1.
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