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Urgent need to raise tax base to achieve fiscal target: Report

Press Trust of India  |  New Delhi 

needs to urgently raise its base to meet the fiscal deficit target without curbing essential expenditure, says a report.

The country's gross fiscal deficit as percentage of GDP, started shooting up after the 2008 financial crisis, said the report -- 'India's Public Trends'.

However, with economic recovery gaining pace, the embarked on the path of fiscal consolidation and has brought down its fiscal deficit to 3.5 per cent of in 2016-17.

"The states' fiscal deficit, however, has increased. To reach the combined target of 6 per cent fiscal deficit for the Centre and states an alignment of the policies of the Centre and states is required," it said.

The report further said: "However, in the ultimate analysis, in a country where close to only 4 per cent of the population pays taxes, it is urgently needed that the base be increased so that austerity measures are not required to remain on the path of fiscal consolidation."

Apart from fiscal consolidation, has also ramped up its in a big way, it said, adding that payments and refunds are now mostly online.

On the revenue side, major tax components were growing healthily before 2007-08, it said.

"After the crisis, the collections were subdued. They have revived, but are still volatile. Disinvestment receipts have picked up pace after the 2008 crisis," it said.

The report said that for 2017-18, the is targeting Rs 72,500 crore worth of disinvestment, an increase of a whopping 59 per cent from the last fiscal.

On the expenditure side, to maintain the fiscal balance while promoting growth, the is focusing on curtailing revenue expenditure, while maintaining the level of capital expenditure, it added.

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

First Published: Mon, January 08 2018. 21:10 IST