With tax collections falling and the subsidy bill risng, the government might have to seek “other ways to increase revenue” in the forthcoming Union Budget 2012-13,” sources told this newspaper, particularly with the need to meet the fiscal deficit target of 4.6 per cent of GDP set in during 2011-12.
This assumes importance as finance minister Pranab Mukherjee has also targeted fiscal deficit to come down further to 3.5 per cent of GDP in 2013-14.
The government is likely to bring more services under the ambit of service tax to increase revenue. There are also questions raised on whether the government will be able to roll out the Goods and Services Tax from April 1, 2012 as scheduled.
The parliamentary standing committee on GST, which is headed by former finance minister and senior Bharatiya Janata Party leader Yashwant Sinha, has not been able to complete discussions on the subject and is yet to table its report.
Speculation is also rife that with industrial production slowing, there is a little chance of the finance minister hiking excise duty in the forthcoming Budget to the pre-crisis level of 2008.