The IMF today said the tax collection assumptions in India's budget is ambitious but there is a need to look into the fiscal implications of some of the initiatives that are presently unfunded.
The IMF today said the tax collection assumptions in India’s budget is ambitious but there is a need to look into the fiscal implications of some of the initiatives that are presently unfunded. Referring to some of the implementations relating to the goods and services tax (GST) in 2017, IMF Director of Communications Department Gerry Rice said if these issues persist, tax revenue collection could fall short on the budget.
“We think the budget assumes the tax revenue will rise faster than the volume of transactions in the economy. So, its ambitious. It assumes the government would be able to climb higher tax revenue from the same amount of consumption and income”, Rice told reporters at his fortnightly news conference. There are also some initiatives in the budget that are presently unfunded and fiscal implications of these need to look at a little bit more closely as more details become available, he said, referring to some of the social welfare programmes announced by Finance Minister Arun Jaitley.
The IMF, he said, is also looking at some of the potential slippages on the revenue side or higher outlays on new policy initiatives because they could result in cost to capital expenditures, which the world body feels is important to support a medium-term growth. “But again, the headline messages is that we welcome the budget targets and we are supportive of that,” Rice added.
In the budget, Jaitley had announced a mega healthcare plan to provide 10-crore poor families with insurance cover against hospitalisation that will cost up to Rs 12,000 crore annually and is likely to be launched on August 15 or October 2. The ‘National Health Protection Scheme’, dubbed as ‘Modicare’ and the world’s largest government healthcare programme, will be funded with 60 per cent contribution coming from the Central government and the remaining from the states.