Revenue shortage may widen fiscal gap in FY19: Report

The report said shortfall in tax revenue worth Rs 22,400 crore is expected on the indirect tax front, as a large part of the indirect tax revenue is being subsumed under GST.

There is likely a shortfall in indirect taxes and non-tax revenues; as a result India will not be able to narrow fiscal deficit to the targeted 3.3 per cent of GDP for the current fiscal, said a report by India Ratings and Research.
 
As per ratings agency, fiscal deficit is likely to reach at about 3.5 per cent of GDP for FY19. Thus, it will come close to Rs 6.67 lakh crore as against the targeted Rs 6.24 lakh crore.
 
The fiscal deficit is the difference between the total revenues and expenditure of the government. This will be the third consecutive year that the fiscal gap number will be at 3.5 per cent, ratings agency, which is a part of the Fitch Group, said.
 
“The pressure on government finances is mainly arising from the revenue side, particularly from indirect taxes and non-tax revenue,” it said.
 
The report said shortfall in tax revenue worth Rs 22,400 crore is expected on the indirect tax front, as a large part of the indirect tax revenue is being subsumed under GST.
 
Even though the introduction of e-way bills has helped the government plug leakages in GST collection, aggregate indirect tax growth came at only 4.3 per cent for the first half of FY19 as against a 22.2 per cent target for the full fiscal, it said.
 
Source: PTI

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