The Interim Budget 2019-20 on Friday pegged the fiscal deficit for the year 2019-20 at 3.4 per cent of the Gross Domestic Product (GDP).
Presenting the budget in the Parliament, officiating Finance Minister Piyush Goyal said, “The estimate of incomes and expenditure which I am presenting today, pegs the fiscal deficit of the year 2019-20 at 3.4 per cent of GDP.”
Goyal in his speech said the government has maintained fiscal deficit at 3.3 per cent for the year 2018-19 and taken further steps to consolidate fiscal deficit in the year 2019-20.
However, considering the need for income support to farmers, Goyal said, the government has provided Rs 20,000 crore in 2018-19 revised estimate and Rs. 75,000 crore in the 2019-20 budget estimate.
“If we exclude this, the fiscal deficit would have been less than 3.3 per cent for 2018-19 and less than 3.1 per cent for the year 2019-20,” he said.
The main focus of the ensuing year will be to improve the expenditure efficiency and improve tax collections to ensure that the economy moves back to the fiscal deficit path.
The Gross Tax Revenue of the Central Government is budgeted at Rs. 25,52,131 crore in BE 2019-20. This reflects a growth of Rs 3,03,956 crore (13.5 %) over RE 2018-19.
Direct taxes are expected to reach Rs. 13,80,000 crore in BE 2019-20 compared to Rs. 12,00,000 crore in RE 2018-19 indicating an increase of 15 per cent over RE. It is expected that direct taxes would be 6.6 per cent of GDP at the end of 2019-20.
Indirect taxes are budgeted at Rs. 11,66,188 crore in BE 2019-20 showing an increase of 11.8 per cent over RE estimates (Rs. 10,42,833 crore). The increase is mainly on account of improvement in GST collections anticipated in 2019-20.
Non-tax revenue collections in 2019-20 is budgeted at Rs. 2,72,647 crore as compared to Rs. 2,45,276 crore in RE 2018-19. This shows an increase of Rs. 27,371 crore over RE 2018- 19.
The finance minister said the total expenditure has reflected a high increase considering low inflation. It has risen by Rs. 3,26,965 crore or approximately 13.30 per cent, from Rs. 24,57,235 crore in 2018-19 RE to Rs. 27,84,200 crore in 2019-20 BE.
The increase in total expenditure is on account of increased support to the agricultural sector, interest payments and internal security, as per the ‘Budget at a Glance’ document.
Regarding disinvestment proceeds, the Government is confident of crossing the target of Rs. 80,000 crore this year and have kept a target of Rs. 90,000 crore in BE 2019-20, Goyal said.
Giving a vision for fiscal consolidation, Goyal said, “We have maintained the glide path towards our target of 3% of fiscal deficit to be achieved by 2020-21”.