The Hindu Business Line : Chidamabram banking on advance tax for revised estimates

Against a revised revenue deficit estimate of Rs 91,621 crore for 2005-06, the Centre's revenue deficit has already touched Rs 92,336 crore during April-January 2005-06 period.

Mr P. Chidambaram

New Delhi , March 6

The Finance Minister, Mr P. Chidambaram, seems to be betting heavily on the last quarter advance tax payments (March 15) and better tax compliance for conforming to the revised revenue and fiscal deficit estimates for the current fiscal.

This is evident from the latest compilation of the Centre's accounts for April-January 2005-06 period by the Controller General of Accounts (CGA).

As against a revised revenue deficit estimate of Rs 91,621 crore for 2005-06, the Centre's revenue deficit has already touched Rs 92,336 crore during April-January 2005-06 period. For 2005-06 it was initially budgeted at Rs 95,312 crore.

Fiscal deficit

As regards fiscal deficit, the Finance Minister has pegged the revised target at Rs 1,46,175 crore (4.1 per cent of GDP) for 2005-06. According to the CGA, the Centre's fiscal deficit for the April-January 2005-06 period touched a level of Rs 1,21,727 crore as against a level of Rs 1,03,801 crore in the same period last year.

The fiscal deficit budgeted for 2005-06 stood at Rs 1,51,144 crore.

Tax revenue

Gross tax revenues of the Centre for the period under review stood at Rs 2,57,558 crore, which is 20.68 per cent increase over the tax revenue level of Rs 2,13,428 crore recorded in the same period last year.

Betting on growth, the Finance Minister has pegged revenue deficit for 2006-07 at Rs 84,727 crore, which is 2.1 per cent of the GDP.

The income-tax law requires corporates and professionals to pay their entire tax liability as advance-tax to the Government by March 15 of a fiscal year. For this purpose, four instalments of advance tax are specified, with the March 1 being the last. It is estimated that about Rs 25,000 crore of advance tax would be paid in the last instalment in March.