Growth to get priority over fiscal prudence, indicates govt official


The Indian Express
ENS Economic Bureau

“Fiscal prudence is important, but growth should take precedence,” the official, who did not wish to be named, said, adding that growth will be the priority.

With economic growth rate slowing down and revenue targets looking out of reach, the government has indicated that it’s focus would rather be on reviving growth than fiscal prudence, a hint that it could overshoot this year’s fiscal deficit target of 3.3 per cent of GDP, a senior Finance Ministry official said on Wednesday. “Fiscal prudence is important, but growth should take precedence,” the official, who did not wish to be named, said, adding that growth will be the priority.

The government is looking at how much space it has within the Fiscal Responsibility and Budget Management (FRBM) Act for a possible fiscal slippage, the official added. The NK Singh committee on FRBM had proposed an escape clause wherein the fiscal deficit could be marginally relaxed by up to 50 basis points to bring in structural reforms. The comments come as the government’s revenue targets for both direct and indirect taxes are lagging behind the budget estimates by a wide margin. The Revenue Department under the Finance Ministry had earlier this week exhorted both direct and indirect tax officers to achieve targets without troubling the taxpayers. With only four months left to meet the overall target, Goods and Services Tax (GST) target has been set at Rs 4.55 lakh crore (Rs 1.10 lakh crore for three months each and Rs 1.25 lakh crore in one month), while direct tax officials have to collect Rs 7.78 lakh crore during the same period.

As per latest data, the fiscal deficit had overshot the full-year target to 102.4 per cent of the full year target in April-October, the first seven months of this financial year, itself.


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