With the fiscal deficit threatening to exceed the target, Finance Minister P. Chidambaram has asked taxmen to step up collections. He also urged cash-rich Central public sector undertakings (PSUs) to pay more dividends.
The Finance Minister, who met the chief commissioners of various zones individually on Monday and Tuesday, discussed revenue targets for each zone and asked them to expedite tax collection.
The tax collection, so far, has been behind target. Direct tax (personal income tax, corporate tax, securities transaction tax and wealth tax) collection grew 12.33 per cent to reach Rs 4.81 lakh crore during April-December, against the target of 19 per cent and collection of Rs 6.68 lakh crore.
Indirect taxes (customs and excise Duty, services tax) collection grew by just 5 per cent during April-December at Rs 3.07 lakh crore. Here, too, the growth target is 19 per cent at Rs 5.63 lakh crore. There is possibility that there may be an overall shortfall of between Rs 40-50,000 crore.
With this in mind, the Minister also met cash-rich CPSUs such as NTPC, BHEL, Indian Oil, Power Grid and Oil India. It is believed that capital expenditure plans were discussed in the meeting and companies were asked to pay more dividends.
However, Oil Secretary Vivek Rae indicated that there could be lower dividend from Indian Oil and Oil India due to “disinvestment and lower profit after tax.”
Chairman and Managing Director of Power Grid R.N. Nayak said the company did not have plans for special dividend and it will be in line with last year. He was talking to reporters after the meeting with the Finance Minister. BHEL Chairman B.P. Rao said the capital expenditure plan was discussed.
The Finance Ministry is also pushing hard for disinvestment. An empowered Group of Ministers (EGoM) is scheduled to meet on Friday to decide on offloading stake in Indian Oil.
The sell-off in Engineers India is also expected this month, while discussions are on to sell Government stake in BHEL to banks and other companies.