Expect some shortfall in FY19 indirect tax collection target, says Finance Secretary

Finance secretary Subhash Garg on March 14 said the government may fall short of indirect tax collections target this financial year.

As per revised estimates, the government had pegged indirect tax collections at Rs 1.3 lakh crore and direct tax collections at Rs 12 lakh crore.

“Direct tax we are reasonably confident, indirect tax there may be some shortfall,” Garg said while speaking to reporters on the sidelines of an event in Mumbai. However, he also said the government might be able to make it up with the help of savings on the expenditure side.

He also said the fiscal deficit target of 3.4 percent is ‘safe’.

On monetary policy, Garg said it is up to the Reserve Bank of India (RBI) to decide on the policy rate action as it tracks inflation trajectory.

While the Consumer Price Index (CPI) or retail inflation came in at a four-month-high level of 2.57 percent in February, it has stayed below the central bank’s medium-term target of 4 percent.

The Monetary Policy Committee (MPC) had reduced the policy rate by 25 basis points to 6.25 percent in the February policy meeting. It also changed its policy stance from calibrated tightening to neutral.

“Headline inflation is projected to remain soft in the near term reflecting the current low level of inflation and the benign food inflation outlook,” the MPC said in the February policy review.

The MPC is next scheduled to meet from April 2-4.