Jaitley projects Fiscal Deficit of 3.3 % of GDP for 2018-19

Speed Post News Network

New Delhi : Continuing Government’s path of fiscal reduction and consolidation, Union  Finance Minister Arun Jaitley, in his budget speech on February 1, 2018, projected a Fiscal Deficit of 3.3% of GDP for the year 2018-19. The Revised Fiscal Deficit estimates for 2017-18 were put at Rs 5.95 lakh crore at 3.5% of GDP. He also proposed acceptance of key recommendations of the Fiscal Reform and Budget Management Committee to bring down Central Government’s Debt to GDP ratio to 40%.

Presenting his direct tax proposals, the Finance Minister said that attempts to reduce the cash economy and increase the tax net have paid rich dividends. The growth rate of direct taxes in financial years 2016-17 and 2017-18 have been significant, he said. The growth of direct taxes in financial year 2016-17 was 12.6 %, and for financial year 2017-18 (up to January 15, 2018) is 18.7 %.

Jaitley said buoyancy in personal income tax for financial year 2016-17 and 2017-18 (RE) are 1.95 and 2.11 respectively. This, the Finance Minister said, indicates that additional revenue collected in the last two financial years from personal income tax compared to average buoyancy for the pre 2016-17 period, amounts to a total of Rs 90,000 crore, which is a result of a strong anti-evasion measures by the government, according to a PIB release.

The Finance Minister also said that there has been a huge increase in the number of returns filed by tax payers. The number of Effective Tax Payers has increased from 6.47 crore at the beginning of Financial year 2014-15 to 8.27 crore at the end of 2016-17.

Jaitley has proposed 100 percent deduction to companies registered as Farmer Producer Companies with an annual turnover upto Rs 100 crore on profit derived from such activities, for a period of five years from financial year 2018-19. This, he said, will promote post harvest agriculture activities.

Turning to the real estate sector, the Finance Minister has proposed that no adjustment shall be made in respect of transactions in immovable property, where the Circle Rate value does not exceed 5 percent of the consideration. This would minimize hardship in real estate transactions.