Tax collection growth in the first quarter of the current fiscal has been “very poor” and it would be tough to meet the 2014-15 goal of achieving 20 per cent higher tax collection, Axis Bank told.
Net tax receipts during the April-July period stood at Rs. 99,087 crore. On Friday, Finance Minister Arun Jaitley told the Parliament the fiscal deficit target for the current fiscal year is “daunting”.
“Jaitley will have to depend on non-tax revenue items like disinvestments. Large disinvestment proceeds are critical to meet FY15 fiscal deficit target,” Saugata Bhattacharyya, senior vice president-Business & Economic Research, Axis Bank said.
Fiscal deficit occurs when the government’s total expenditure exceeds its total receipts. Mr. Jaitley has promised to narrow the deficit to 4.1 per cent of GDP (gross domestic product) during the current fiscal from 4.5 per cent a year earlier. However, many economists have dubbed the deficit target rather optimistic, citing weak tax receipts in a sluggish economy and high government expenditure commitments.
India’s fiscal deficit in the first quarter of FY15 touched Rs. 2,97,859 crore or 56.1 per cent of the full-year target, government data showed on Thursday. The deficit was 48.4 per cent during the same period last year.