Amid apprehensions of slowdown impacting tax collection, Finance Minister Pranab Mukherjee on Friday exuded confidence that the government would be able to meet the revenue targets set in the budget for 2011-12.
“The growth of revenues upto June is reasonably satisfactory. Therefore, I do not apprehend that there will be any slippage,” Mr. Mukherjee told reporters to a query related revenue collections.
He was talking after meeting chief executive officers of public sector banks and other financial institutions.
The Finance Minister said government set targets assuming normal conditions.
However, he added, “there may be (slowdown in revenue collections) if there is a slow (economic) growth, if there are unprecedented happenings and events“.
The Centre expects to collect over Rs 9.32 lakh crore tax revenues this fiscal, about 24.98 per cent up from the previous year.
However, there are apprehensions that revenue collection, both on direct and indirect fronts, could be impacted due to high global commodity prices and high inflation.
Net direct tax collections in the first quarter dropped by almost 17 per cent to Rs 57,268 crore year-on-year.
Besides, the Government would be losing about Rs 49,000 crore on account of cut in customs and excise duty on petroleum products.
In the Budget speech, Mr. Mukherjee had pegged the economic growth for the current fiscal at around 9 per cent but two-months later the RBI came out with a lower projection of about 8 per cent GDP growth.
The central bank has hiked key policy rates 10 times since March 2010.
The high interest rate regime has impacted the country’s industrial growth rate, which shrunk by more than half to 6.3 per cent during April.