India: FinMin says no new taxes on the anvil despite need for cash

India's government has set itself a difficult task in vowing to keep the fiscal deficit at 5.3% in the current fiscal year and bring it down to 4.8% by 2014 and 3.0% by 2016-17. But Finance Minister P. Chidambaram 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," according to an unnamed official in the finance ministry.

Government sources said the minister is betting on disinvestment in public sector companies and auction of spectrum for telecom firms to raise government revenue, the Hindustan Times reported Wednesday.

“This [deficit to GDP ratio] 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,” the paper quoted a finance ministry official as saying, on condition of anonymity.

In recent months, Prime Minister Manmohan Singh has increased prices for petrol and diesel fuel to reduce the subsidy the government pays to oil companies, in a bid to move closer to balancing the budget. And a move to institute a Goods and Services Tax (or VAT) is also afoot to try to boost collections and simplify the business environment.

At the same time, however, Singh's Congress Party continues to bank on costly programs like a national employment guarantee scheme and an expansion of food subsidies for the poor to deliver votes in the next election, scheduled for 2014.