Govt manages to meet revised fiscal deficit target of 3.4% of GDP

Finance Secretary Subhash Chandra Garg said the government is close to meeting fiscal deficit target of 3.4% for 2018-19

The government has managed to meet the revised fiscal deficit target of 3.4 per cent of the GDP after it cut last minute expenditure and rolled over fuel subsidies to make up for the shortfall in tax collection.

The interim Budget presented in February revised upward the fiscal deficit target to 3.4 per cent from 3.3 per cent of GDP estimated earlier for 2018-19.

According to sources, the revised target has been met with the help of expenditure savings and other measures including the rollover of the fuel subsidy. As a result, the shortfall in tax collection has been matched.

There has also been some increase in non-tax revenue collection, especially on account of disinvestment proceeds.

About Rs 25,000-30,000 crore worth of subsidies due to PSU oil companies for selling LPG and kerosene oil below the cost during 2018-19 have been rolled over and will now be paid in the current financial year.

Last week, Finance Secretary Subhash Chandra Garg said the government is close to meeting fiscal deficit target of 3.4 per cent for 2018-19.

"We are very close to meeting (fiscal deficit)," he had said when asked whether the government has met the fiscal deficit target.

The government is estimated to have witnessed a shortfall of Rs 50,000 crore in direct tax collection target of Rs 12 lakh crore for 2018-19, a senior finance ministry official said.

The government had revised the direct tax collection target upwards to Rs 12 lakh crore from the original Budget Estimate of Rs 11.5 lakh crore for 2018-19. It was expecting higher collections from corporate taxes.

The revision was made during the interim Budget for 2019-20 in February.

As far as non-tax revenue collection is concerned, the government has exceeded its disinvestment target for 2018-19 by Rs 5,000 crore, taking the total proceeds to Rs 85,000 crore.

Besides, the non-tax revenue was boosted by the second interim dividend collection from various companies including Coal India, IOC and ONGC.