FM hints at stable tax regime despite fiscal deficit concerns

FM hints at stable tax regime despite fiscal deficit concern
Easing the concerns of certain kind of new taxes or significant increase in the older ones in the upcoming Budget, the finance minister P Chidambaram said that he would stick to his five year road map for fiscal consolidation by raising the revenues at 20 per cent every year while keeping the taxes stable and curbing unnecessary expenditures, a media report said.

On a road-show to sell India's growth story to foreign investors, Chidambaram also assured investors of restricting the country's fiscal deficit at 5.3 per cent in the current fiscal and then reducing it by 0.6 percentage points every year to three per cent by 2016-17. Chidambaram said this would be possible with a stable tax regime, non-adversarial tax compliance and a fair dispute mechanism, as they will raise government's revenues by 20 per cent, said a note by Bank of America-Merrill Lynch.

For those concerned over India's rating downgrade threat, FM said fiscal deficit target in this year will be met mainly by reducing expenditures and bringing in austerity measures. He also expressed confidence that disinvestment target of Rs 30-k crore will be met as NTPC's stake sale will fetch around Rs 11,000 crore.

Read more about: tax, fiscal deficit
Story first published: Thursday, January 24, 2013, 9:30 [IST]
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