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PTI mumbai India
Updated: 26-11-2018 13:52 IST

Despite repeated assurances,

India will not be able to narrow fiscal deficit to the

targeted 3.3 per cent for 2018-19 of GDP on a shortfall in

indirect taxes and non-tax revenues, a report said Monday.

Fiscal deficit, a key factor determining the

macroeconomic health, will come at 3.5 per cent of GDP for

FY19, domestic ratings agency India Ratings and Research said.

This will be the third consecutive year that the fiscal gap

number will be at 3.5 per cent, it said.

The deficit, which is the difference between the total

revenues and expenditure of the government, will come at Rs

6.67 lakh crore as against the budgeted Rs 6.24 lakh crore.

"The pressure on government finances is mainly arising

from the revenue side, particularly from indirect taxes and

non-tax revenue," the agency, a part of the Fitch Group said.

A tax revenue shortfall of Rs 22,400 crore is expected

on the indirect tax front, it said, adding that since the

introduction of Goods and Services Tax in July 2017, a large

part of the indirect tax revenue is being subsumed under GST.

It added that even though the introduction of e-way

bills has helped the government plug leakages in GST

collection, aggregate indirect tax growth came at only 4.3 per

cent for the first half of FY19 as against a 22.2 per cent

target for the full fiscal.

The non-tax revenue is also expected to be lower by Rs

16,200 crore than the budget estimate of Rs 2.45 lakh crore,

it said, attributing this to lower dividends from state-run

enterprises and RBI, lower receipts from communication

services and lower divestments.

In case of RBI, it said the central bank has provided

an interim dividend from its FY18 profits to the Government

before March 2018 and hence the dividend receipts

will be lower.

On divestments, it said only Rs 15,247 crore has been

realised in the first half as against a budget target of Rs

80,000 crore.

It said revenue expenditure growth in the first half

has been lower than the budgeted figure, but faces pressures

due to a steep increase in the minimum support price of kharif

crops and the implementation of Ayushman Bharat scheme.

"By reducing capital expenditure, the government will

again try to reduce the adverse impact of both increased

revenue expenditure and shortfall in receipts on the fiscal

deficit," it warned.

The government has been repeatedly saying that it will

meet its commitments under the fiscal consolidation roadmap.

Last Saturday, finance minister Arun Jaitley had said that the

Centre does not need money from RBI to meet the fiscal

deficit targets.

The gap had touched 95 per cent of the budget level

for the first half of the fiscal year, at Rs 5.94 lakh crore.



(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)