Even though finance minister Arun Jaitley stuck to his fiscal consolidation road map by keeping the budget deficit target for 2016-17 at 3.5% of gross domestic product, his fiscal math looks dubious.
The government, for instance, has missed its direct tax collections target this year, and that is unlikely to change in the next fiscal year. The overall target for tax revenue in 2015-16 was achieved only because of higher revenue collection through indirect taxes.
After failing to achieve the corporation tax target of Rs.4.5 trillion, the government has budgeted an increase of around Rs.41,000 crore in 2016-17 at Rs.4.9 trillion, despite no perceptible sign of improvement in the profitability of private companies.
A steep disinvestment target has also been set at Rs.56,500 crore for 2016-17 including Rs.36,000 crore from minority stake sale and an additional Rs.20,500 crore from strategic stake sales during the year.
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