The government today admitted that the tax collection may fall short of target by 5-7 per cent, but expressed confidence that the economy will clock over 7.5 per cent growth this year without hurting the fiscal deficit road map.
Addressing a press conference on completion of first half of the current fiscal, Finance Secretary Ratan Watal said the government will continue with the reforms agenda to achieve the potential growth of 8 per cent plus over time.
"Our macro-fundamentals remain strong. We are now better placed to handle unforeseen external shocks and put India firmly on the path of economic recovery and inclusive prosperity," he said at a media interaction during which other secretaries and the Chief Economic Advisor were present.
The twin deficits - fiscal and current account - have been reduced, he said, adding that "the government is committed to achieving this year's fiscal deficit target as well as the fiscal glide path laid out in the Budget".
He further said the government is trying hard to sort out legacy issues of tax demands "raised retrospectively through mutually beneficial solutions".
One of the concerns is revenue collections, which according to Revenue Secretary Hasmukh Adhia will fall short of the budgetary target by 5-7 per cent, mainly because of subdued growth in direct taxes.
The total tax revenues are likely to be around Rs 14 lakh crore in the current fiscal, as against the Budget estimate of Rs 14.5 lakh crore.
On growth, Economic Affairs Secretary Shaktikanta Das said there are indications that it will exceed 7.5 per cent in the current financial year.
"Despite the global slowdown and declining export demand, India has emerged as the fastest growing major economy in the world," he said.
