The government is hoping to keep fiscal deficit at 5.3% in the current fiscal (the Budget had put the figure at 5.1%), and is aiming to bring it down to 4.8% by 2014 and 3.0% by 2016-17.
“This is a steep target considering the situation on hand, but the government is not likely to bring in any kind of additional burden for companies in the form of any kind of tax in the next Budget,” an official said on condition of anonymity.
Government sources said the minister is betting on disinvestment in public sector companies and auction of spectrum for telecom firms to yield significant revenue in his quest to control the deficit.
Earlier this year, while presenting the Union Budget as finance minister, President Pranab Mukherjee had announced a General Anti-Avoidance Rule (GAAR), to be implemented on a retrospective basis, which had significantly dampened investor sentiment.
Chidambaram has said that different classes of stakeholders must share the burden of fiscal correction equitably, though all flagship financial inclusion programmes of the UPA government would be protected.
The government is likely to make a “quick review” of the Direct Taxes Code (DTC) before it is introduced in Parliament next month. The Vijay Kelkar panel, which was constituted to prescribe a formula to bring India back on the path of fiscal consolidation, had said the DTC and the goods and services tax must be implemented at the earliest.