Govt will meet all fiscal targets, Arun Jaitley says after review

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The Finance Minister also said that capital expenditure targets would also be met

The government will stick to the fiscal deficit target of 3.3 percent this fiscal as it expects buoyant tax revenues and exceeding disinvestment target, Finance Minister Arun Jaitley said Saturday.

"We will have a growth rate higher than what we'd projected earlier this year in the budget", Jaitley said, after he and his team briefed Prime Minister Narendra Modi on the economy.

While various commentaries have observed that the government might have to resort to capital expenditure cuts to contain the fiscal deficit, Jaitley said, "We have already spent about 44 per cent of the Budget Estimates till August 31 and we will end the year without any cut.

We are confident of maintaining the divestment target too", Jaitley said, adding that both demonetisation and the Goods & Services Tax (GST) had started yielding results.

He also exuded confidence of surpassing the Rs 1 lakh crore target from disinvestment proceeds. "And the CBDT itself is very clear that this year they will be able to collect in excess of the Budgeted target".

"With regard to GST and other indirect taxes, GST is settling down and with the kind of pickup in consumption which has taken place, it will have an impact on GST collection in future months and we're confident that between direct and indirect tax collections, govt would comfortably meet target", Jaitley told reporters.

He, however, did not say if the meeting discussed the recent spike in fuel prices that has led petrol touching a record high of Rs 81.63 per litre and diesel to Rs 73.54 a litre. The BJP leader also said the inflation was broadly under control.

Briefing the media about the discussions held during the meeting with the Prime Minister, FM Jaitley said that PM was satisfied with the macroeconomic data. "I think it should have an impact of $8-10 billion", he was quoted as saying by PTI. The government is under pressure from the opposition parties over high fuel prices. This has widened India's current account deficit and pushed its balance of payments into the red in April-June for the first time in six quarters.

The steps include removal of withholding tax on rupee-denominated bonds known as Masala bonds issued till March next year, relaxation for Foreign Portfolio Investment (FPI), and curbs on non-essential imports. On Saturday, the meeting reviewed revenue and expenditure positions. "There is phenomenal increase in the assessee base.in the quantum of advance tax which has been paid", he said. "I am reasonably confident of the government meeting the total tax receipts target, combining direct and indirect taxes, as any slippage on indirect tax collection may be compensated by growth in direct taxes".

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