FM Arun Jaitley blames high fiscal deficit on increased tax refunds

Written by ENS Economic Bureau | New Delhi | Updated: Nov 1 2014, 15:02pm hrs
Arun JaitelyThe Centre has pegged its fiscal deficit at 4.1 per cent of the GDP or Rs 5,31,177 crore for 2014-15.
Finance minister Arun Jaitley on Friday blamed high income tax refunds for the high fiscal deficit of the Centre that touched 83 per cent of the full year target in just six months.

Higher tax refunds are getting reflected in fiscal deficit number. This year, there were pending tax refunds estimated around Rs 1.20 lakh crore, he said.

Data released by the Controller General of Accounts on Friday revealed that the Centres fiscal deficit touched Rs 4,38,826 crore or 82.6 per cent of the Budget estimate (BE) between April and September 2014.

More worryingly, the revenue deficit touched 91.2 per cent of the BE to Rs 3,45,053 crore in the half year. Revenue receipts amounted to Rs 4,232,27 crore or a third of the full year target with tax receipts Rs 3,23,191 crore or 33.1 per cent of the BE In the half year.

However Jaitley maintained that the Centre would try to meet the fiscal deficit target. It would be challenging to achieve indirect tax aim. Direct tax target would be achievable. We would strive to achieve fiscal deficit aim for this fiscal, he said.

The Centre has pegged its fiscal deficit at 4.1 per cent of the GDP or Rs 5,31,177 crore for 2014-15 and was hoping for some respite through the lower crude oil prices in the global markets that would translate into a lower fuel subsidy.

Total expenditure touched 48 per cent of the full year target at Rs 8,62,053 crore in the first half of the fiscal. Of this plan expenditure totalled Rs 2,46,289 crore or 42.8 per cent of the BE while non-plan expenditure crossed the half way mark to amount to Rs 6,15,764 crore. Meanwhile, addressing the Parliamentary Consultative Committee on finance, Jaitley said that the major priority of his government is to bring back growth momentum into countrys economy.