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Fiscal
deficit soars to Rs.77,480 crore
New
Delhi: The Central government's fiscal deficit rose
to Rs77, 480 crore which is more than 50 per cent of the
budget estimate of Rs1,51,144 crore for the entire 2005-06.
According
to the latest data released by Controller General of Accounts
(CAG) the fiscal deficit till July this year works out
to 2.2 per cent Gross Domestic Product (GDP) while revenue
deficit was close to two per cent of GDP. According to
the data, the fiscal deficit stood at Rs77, 480 crore
during April-July 2005-06, which is 51.3 per cent of budget
estimate.
Revenue
deficit also rose to Rs68,929 crore during April-July
this year, which is over 72.3 per cent of the budget estimate
of Rs95,312 crores for the current fiscal. Revenue deficit
was at Rs58,076 crores during the first four months of
previous fiscal 2004-05, which worked out to 76.2 per
cent of budget estimates.
In
its quarterly review report, the Ministry had identified
major fiscal challenges in management of subsidies, implementing
Twelfth Finance panel recommendation and finding additional
funds needed for rural job scheme. The impact of these
was likely to strain the fiscal situation in coming months,
the Ministry has warned.
Tax
revenues during April-July 2005 increased by 25 per cent
to Rs43,964 crores, which is 16 per cent of the budget
estimate of Rs2,73,466 crore for the entire fiscal 2005-06.
CAG
data also shows that the Centre's non-plan expenditure
during April-July 2005 stood at Rs98,441 crore, which
is 26.5 per cent of budget estimate of Rs3,70,847 crore
during 2005-06. The Centre's plan expenditure during April-July
2005 stood at Rs37,632 crore which is 26.2 per cent of
the budget estimate of Rs1,43,497 crore for 2005-06, the
CAG report has pointed out.
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Chidambaram:
Lowering of taxes for small cars to be looked into
New Delhi: Finance minister P Chidambaram has said
that the government is planning an overhaul of the tax
structure for automobiles in order to provide a fillip
to manufacturing of small cars and discourage the use
of old commercial vehicles.
"A
number of companies have proposed to manufacture small
cars and some are looking at India as an export base.
I am aware of the tax problems of the automobile industry
as cars are clubbed in the luxury goods bracket with tobacco
and alcohol. So, we need to revisit the issue sooner than
we had planned," Chidambaram said at the annual session
of the Society of Indian Automobile Manufacturers here.
He
said the government would also look at extending tax benefits
on research and development spending, available till the
end of this financial year.
Along
with Maruti Udyog Ltd, Hyundai Motor India and Tata Motors
will be the other beneficiaries of any such move by the
govt. Hyundai's Santro and Tata's Indica are classified
as small cars and sell in large numbers. Fiat, too, will
be able to lower the price of its 1,300 cc Palio. Other
automobile manufacturers operating in India, such as Toyota
Kirloskar and General Motors India, also have plans to
enter this segment by 2007.
Reacting
to a suggestion of Maruti Udyog managing director and
outgoing Society of Indian Automobile Manufacturers (SIAM)
president Jagdish Khattar, the finance minister said he
was in favour of taxing old commercial vehicles heavily
to discourage their use.
On fringe benefit tax, the minister also said the government
was willing to discuss anomalies that had crept into the
explanatory notes on the FBT issued earlier this week.
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