7th Pay Commission award will not impact fiscal deficit target
The government on Monday made a solemn pledge to stick to the fiscal deficit target of 3.9 per cent of GDP, despite an expectation of a slight revenue fall, and said that the 7th Pay Commission award will not impact this year’s target and the glide path for fiscal deficit laid in the Budget.
Finance Secretary Rattan Wattal said that the 7th Pay Commission award will not impact FY16 fiscal deficit target. While there is fear of some revenue shortfall, especially on the direct tax front, Wattal said that the government does not want to go in for any expenditure cuts to meet the deficit target. The FY16 plan spending target is realistic and reasonable, he said.
Wattal said the government’s capital expenditure has improved significantly and will have a multiplier effect on the economy.
Chief Economic Adviser Arvind Subramanian said that the government was absolutely committed to fiscal glide path. The revenue assumptions have been very realistic this year. Tax revenue collections so far have been satisfactory, except for some shortfall in April-September direct tax growth which is around 12 per cent.
“There may be a short-fall in direct tax collection,” Revenue Secretary Hasmukh Adhia said, but added that it will be compensated by indirect tax receipts. There may be 5-7 per cent shortfall in tax collection target, he said.
Source : Deccan Herald