Growing revenues will lower fiscal deficit, says Revenue Secretary Tarun Bajaj

Revenue Secretary Tarun Bajaj

Union Revenue Secretary Tarun Bajaj on Friday said that the country's fiscal deficit will come down once revenues start to grow.

Speaking at a webinar organised by the Bengal Chamber of Commerce and Industry (BCCI), Bajaj said that the government had adopted a loose fiscal policy on the backdrop of increased capital expenditure.

"The fiscal deficit at present is 6.9 percent of the GDP. The target for 2025-26 is to bring down to 4.5 percent. If we continue to grow our revenues, the fiscal deficit can come down by 0.1 or 0.2 percent", he said.

Next year, the targeted fiscal deficit is 6.4 per cent, Bajaj said, adding that the government had the opportunity to lower it further. "But increased capital expenditure by almost 35 per cent had forced us to keep the fiscal level at that level", he added.

The Revenue secretary said since last year, the Centre had started giving money to the states for making capital expenditure. Unless this is done, the last mile infrastructure will not take place, Bajaj added. "The intention of the government is to keep the GDP growing. Then only income and revenues will be better", he stated.

On the taxation part, he said the emphasis was on to maintain stability so very little tinkering was done. On the direct taxes, he said 55 per cent of the revenue on this count was coming from transactions based on TDS.

Bajaj said increased capital expenditure will lead to increased consumption and spending.