Fiscal deficit target achievable on higher tax revenues, says Finance Minister Arun Jaitley

Finance Minister Arun Jaitley on Friday said a ‘realistic’ fiscal deficit target of 3.2 per cent of GDP has been fixed for 2017-18 and 3 per cent for the next year that could be achieved on account of higher tax revenues and disinvestment proceeds.

FM Arun Jaitley was addressing a post-Budget interactive session with industry associations at Vigyan Bhawan in New Delhi on Friday.

Main highlights from the session.

--- Budget 2017-18 does not factor in the full gains of demonetisation

"As far as demonetisation is concerned, we will bear in mind that whatever is the revenue and other gains of it, they have not been fully factored. As against the 17 per cent growth in (tax) revenue in the last two years, we have actually put it at 12 per cent this year. A target which we could surpass.

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--- Fiscal deficit target achievable
Encouraged by buoyancy in tax revenues, the government has set a "realistic target" of 3.2 per cent fiscal deficit in 2017-18 against 3.5 per cent in the current year, he said, adding that a roadmap to take it to 3 per cent in 2018-19 has been planned.

---Higher divestment target
"We have a much higher target for disinvestment. Eventually, more and more PSUs including general insurance companies will be listed and as per listing requirements, we are required to divest a part of their equity as well," he said.

---Time to do away with FIPB

Abolishments of Foreign Investment Promotion Board (FIBP) is to cut red-tapism.  This is because "90 per cent of the FDI comes through automatic route. During the course of the year, we will bring out the entire roadmap for the abolition of FIPB, we intend listing of several PSUs to make them more competitive and transparent," he added.

 ---Electoral Bond- a promissory note

- 'Electoral Bonds' will resemble a promissory note and not an interest-paying debt instrument, will be sold by authorised banks and can be deposited in notified accounts of political parties within the duration of their validity. Jaitley, who had capped anonymous cash donations to political parties at Rs 2,000, said bonds can be purchased using cheque or e-payments only. "So in the hands of the recipient it is clean money, in the hands of donor it will be tax paid money."

-- Levy of 10 per cent surcharge on rich

Reading out taxpayer data, he said excluding salaried class, there are only 20 lakh people who voluntarily declare their income of over Rs 5 lakh in a year. "In a non-tax compliant society, the state needs resources and the resources will have to come from the more affluent as far as the tax structure is concerned. There is a social equity also behind this," Jaitley said.

(With PTI inputs)