Govt wont cross FY14 deficit target; CPSU ETF coming up

Written by fe Bureau | New Delhi | Updated: Jan 12 2014, 09:05am hrs
Despite the fiscal deficit during April-November touching 94% of the Budget estimate, JD Seelam, MoS for finance, on Saturday exuded confidence that it will not overshoot the target of 4.8% of GDP during 2013-14. We have reviewed tax collections recently. Let me tell you, the red line on fiscal deficit of 4.8% will not be breached, Seelam said at an investors' conference organised by the Association of National Exchanges' Members of India. The government will pursue tax reforms by trying to expedite the Direct Taxes Code and Goods and Services Tax Bills, he added.

The government is also considering setting up an exchange trade fund (CPSU ETF) thatll invest in shares of government-owned firms, he said. The CPSU ETF, which will buy shares of blue-chip PSUs and sell them to retail investors in the form of mutual fund units, is conceived to help the government meet the R40,000 crore disinvestment target for 2013-14.

So far, the government has raised R1,325 crore through sale of shares in MMTC, Hindustan Copper, National Fertiliser, ITDC, Neyveli Lignite and STC. Big-ticket disinvestments are yet to happen as the proposed 5% stake sale in Coal India to raise R10,000 crore has been held up.