Sunday, April 07, 2013

FY 2013 revenue target met, fiscal deficit lower than 5.2%: Chidambaram
New Delhi: Finance Minister P. Chidambaram on Saturday said the fiscal deficit for 2012-13 will be better than 5.2 per cent as tax collection target of over Rs 10.38 lakh crore has been achieved.

"As always there will be some savings (on expenditure). So what does it mean ... if we reach the revenue target and if there are some savings, the fiscal deficit will be better than 5.2 per cent that I have projected," Chidambaram told reporters here.

He, however, did not 'hazard a guess' on the actual fiscal deficit number for 2012-13.

On revenue collections, Chidambaram said while there was a slippage on direct taxes front, the indirect tax mop up has exceeded the revised estimates.

"In the indirect taxes there was excess over the target. In the direct taxes, there was a shortfall over target. But overall we have achieved the target of over Rs 10.38 lakh crore," he said, adding that the revenue growth in 2012-13 was 16.7 per cent.

He said this revenue growth is 'commendable' in the 'difficult year' of 2012-13 when the economic growth is expected to be 5 per cent or a shade above it. The revised estimates was to collect over Rs 5.65 lakh crore from direct taxes and Rs 4.69 lakh crore from indirect taxes. Total expenditure was pegged at Rs 14.30 lakh crore.

With savings in expenditure, the fiscal deficit is expected to be lower than 5.2 per cent as projected in revised estimates.

As per government's fiscal consolidation road map, the gap between revenue and expenditure is to be brought down to 4.8 per cent by 2013-14 and 3 per cent by 2016-17.

The Finance Minister also exuded confidence that the revenue target for 2013-14 financial year would be achieved as the GDP growth is likely to be over 6 per cent.

"Revenue target of 2013-14 is achievable ... because we believe GDP will grow by 6 per cent or above 6 per cent," he said.

When asked about the results of the over one lakh letters sent by Income Tax department to non-filers, Chidambaram said he was happy that the approach was paying dividends.

"I think our non-adversarial and tax payer friendly approach is paying off. These very kind and loving letters are paying off and people are filing returns.

"I am telling my officers this is the approach to take ... Tell them (non-filer or stop filers) we have the information about you, why don't you file your return. It is paying dividend," a smiling Finance Minister said.

Detailing the results of I-T letters, he said the number of e-returns filed in 2012-13 have increased by over 50 lakh to more than 2.14 crore against the previous fiscal.

To a query on the record high current account deficit (CAD) in the October-December quarter of 2012-13, he said the final numbers for the financial year would be more tolerable.

He further said exports would have to be increased and unnecessary imports needs to the curbed to bring down the CAD.

The CAD, which reflects the gap between outflow and inflow of foreign currency, touched a historic high of 6.7 per cent in the third quarter on account of higher imports of oil and gold and slowdown in exports.

"The fourth quarter number, whatever RBI has been able to capture, will be much smaller and number for the whole year will be more acceptable, more tolerable. If you are surprised by the largeness of the third quarter number, perhaps you will be surprised by the smallness of annual number," he said.

He further said gold imports are taking place because of inflation. "We have to contain inflation," Chidambaram said.

Asked about Vodafone taxation issue, he said the amendments to the I-T Act would be moved in Parliament after a way to resolve the issue is found. He said it is unlikely that the amendments would be moved in the ongoing Budget session.

The British telecom major, facing a Rs 11,200 crore tax demand, has sought conciliation with the Indian government.

The Union Cabinet will take a final decision whether to go for conciliation.

Chidambaram also said an inquiry has been initiated against the individuals whose names appeared in a global report on the monies stashed in tax heaven.

"Yes. We have taken note of the names and inquiries have been put in motion in respect of the names that have been exposed", he said when asked whether the government has taken any action with regard to expose in connection with bank accounts in tax havens.

A worldwide media expose is claimed to have unearthed details of 2.5 lakh individuals and entities from more than 170 countries, including India, that evaded taxes by setting up companies in tax havens. The International Consortium of Investigative Journalists (ICIJ), a body of newspersons from across the world, has reportedly found a trove of 2.5 million digital files, detailing "secrets of more than 1,20,000 offshore companies and trusts and nearly 1,30,000 individuals and agents".

On the sting operations carried out by Cobrapost alleging money laundering by some officials of ICICI Bank, Axis Bank and HDFC Bank, Chidambaram said the Reserve Bank is seriously looking into the issue and stern action will be taken by the government if any violation of tax law was found.

"RBI is seriously looking into the matter", he said, adding, "my officers have taken a look at ... sting. They have drawn some conclusions, we are looking into it. If violation is found (with regard to tax laws), stern action will be taken".

Courtesy: Deccan Chronicle