Union finance minister Yashwant Sinha yesterday said the military operations in Kargil would have an adverse impact on the Budget.
He, however, said it was too early to provide the exact details of whether government borrowings would go up on account of Kargil.
The finance minister also ruled out any impact of the Kargil conflict on interest rates after meeting Reserve Bank of India (RBI) governor Bimal Jalan.
Sinha refused to comment on reports that the government plans to impose a tax to recover the costs of the Kargil operations.
But he said the government intended to target a wider tax base against the groundswell of patriotism witnessed across the country.
"We should give a push to this movement and if we do so we should achieve significant results. That is how we propose to tackle the fiscal deficit," Sinha said.
The finance minister said he saw in the economy "robust signs of revival", based on latest revenue collections and industrial output data.
He said the revenue collections were buoyant, with indirect taxes registering a growth of 21 per cent.
However, the fiscal deficit continued to be the most intractable problem being faced by the economy, the finance minister said after addressing a meeting of the Indian Merchants Chamber (IMC) here.
Internal borrowings have crossed all limits and have to be checked in any event, he said.
Addressing the broking community at the Bombay Stock Exchange after inaugurating the Central Depository Services Ltd and the BSE on-line surveillance system, Sinha stressed the role of insurance and pension funds in widening and improving liquidity in the capital market.
"We had discussed with the RBI the issue of participation of other players like LIC and GIC and the truth is that these institutions are trustees of other people's monies. They have to keep hat trust and cannot take unwarranted risk. They would have to invest on
