Signaling buoyancy in economy in general and industry and services sectors in particular, Finance Minister P Chidambaram on Monday sought to raise revenues by a robust 17 per cent, while limiting hike in spending to a marginal 1.7 per cent in a bid to control government's deficit in 2005-06.
Yet, Chidambaram will have to take recourse to a higher borrowing and other liabilities by 9 per cent at Rs 1,51,144 crore (Rs 1511.44 billion) to keep fiscal deficit marginally lower at 4.3 per cent of the GDP in 2005-06.
The Union Budget, presented in Parliament on Monday, has proposed cuts in corporate tax, customs duties and rationalisation of income tax slabs but still targets to keep its revenue deficit at 2.7 per cent of GDP for 2005-06, same as the revised estimate for 2004-05.
The Centre, however, overshot its revenue deficit target marginally by 0.2 per cent from 2.5 per cent budgeted for 2004-05, while failing to rein in fiscal deficit to budgeted level of 4.4 per cent that was revised up to 4.5 per cent.
For 2005-06, total revenue receipts has been budgeted at Rs 3,51,200 crore (Rs 3512 billion) as against revised estimate of Rs 3,00,904 crore (Rs 3009.04 billion) and budget estimate of Rs 3,09,322 crore (Rs 3093.22 billion) for 2004-05.
Of the total revenue receipts, tax collections is slated to grow by over 21 per cent to Rs 2,73,466 crore (Rs 2734.66 billion) next fiscal from the revised estimate of Rs 2,25,804 crore (Rs 2258. 04 billion).
Non-tax revenues will go up marginally to Rs 77,734 crore (Rs 777.34 billion) next fiscal from the estimated Rs 75,100 crore (Rs 751 billion) in 2004-05. Capital receipts is targeted lower at Rs 1,63,144 crore (Rs 1631.44 billion) next fiscal as against Rs 2,04,887 crore (Rs 2048. 87 billion) in 2004-05 despite hike in borrowing and other liabilities.