Tax mop-up helps rein in fiscal deficit

 A spurt in tax collections and front-loading of the ambitious disinvestment programme have helped the government rein in fiscal deficit during the first half of the current financial year. 

Data released by the controller general of accounts on Friday estimated the Centre's fiscal deficit at 68% of the Budget estimate for 2015-16, compared to almost 83% a year ago. This was largely due to the revenue receipts adding up to 45% of the full year target, as against 35% during April-September 2014 Stock Market Trading Tips

Buoyant indirect tax collections have been the key reason for a faster run rate. On a net basis, customs duty were 18.5% higher at Rs 1.03 lakh crore, which can be attributed to higher import tariff on crude petroleum as also a weaker rupee. But, the real increase was in excise with the mop-up rising 70% to Rs 1.03 lakh crore. This was again due to higher taxes on petroleum products, white goods and automobiles as well as a rejig in some of the schemes in the budget. Service tax collections were nearly 21% higher but are expected to rise in the months ahead as the impact of the duty increase kicks in. 

Things were, however, slow on the direct tax front as corporation tax rose 12.5% to Rs 1.8 lakh crore, while the Centre's income tax kitty was grew at under 12% to Rs 1.2 lakh crore during the first half Himanshu Tiwari Astrologer Blog

What also helped matters was generous dividend payment by the RBI, which helped the government report healthier non-tax revenue numbers. Similarly, disinvestment in IndianOil and some other public sector companies — where LIC was the primary investor — helped the central government mop up Rs 12,800 crore during the first half, compared to zero receipts in the corresponding period last year. 

At the same time, expenditure was only a shade higher at 51% of the budget estimate for the year, compared to 48% a year ago. 

Despite an expected shortfall in disinvestment and revenue collections, overall finances look healthier this year due to weaker oil prices, which has eased the burden on the government to dole out higher subsidies Commodity Market Astrology Tips