'Rs 40,000 cr revenue foregone to give fiscal stimulus'

Revenue worth over Rs 40,000 crore was foregone to provide fiscal stimulus to the economy following the global financial meltdown, Finance Minister Pranab Mukherjee said today.     

There was a shortfall in revenue collection of Rs 18,268 crore with the actual collection amounting to Rs 608,091 crore against the revised estimate of Rs 626,359 crore, he detailed in Lok Sabha during Question Hour.     

"The shortfall in indirect tax collection was on account of the government's foregoing of revenue of over Rs 40,000 crore to provide fiscal stimulus to the economy," the Finance Minister said.     

This was the "net impact" of the three fiscal stimulus packages given late last year and early this year by the government in the wake of the economic downturn that had led to a shortfall in indirect tax collection, Mukherjee said.     

The tax concessions given to boost the ailing manufacturing sector "will definitely have an impact on the overall revenue earned by the government," he added.     

With the global slowdown affecting profits of companies and leading to lesser salary payouts, there was a decline in collection of corporate and personal income taxes, Mukherjee said, adding that the subdued stock market also impacted Securities Transaction Tax collections.     

Hence, the direct tax collections were also "below the revised estimates," the Finance Minister shared.