Talking to reporters at the Assocham conference on "All India Tax and Company Law Conference", revenue secretary Javed Choudhury admitted that the government finances were under pressure because of poor industrial performance and lower than expected indirect tax collection.

He added that the government has decided to cut non-plan expenditure by 10 per cent as part of measures to check overshooting of fiscal deficit.

The total non-plan expenditure as per the 1998-99 budget amounts to Rs 1,95,925 crore and 10 per cent across the board cut would mean a straight saving of about Rs 19,500 crore. However, as many of the expenditure on the non-Plan side like interest, defence etc. are committed, the government would have to look hard for possible areas of expenditure cut to save the budget.

On the revenue front, Choudhurysaid that although the direct tax collections were buoyant and were up by 19 to 20 per cent, the economic slowdown was being reflected in indirect taxes. The indirect tax collection was up by only 7 per cent as compared to last year.

The revenue department, he said, would concentrate on better compliance during the course of the year to make up for the shortfall on account of sluggish economic growth. The focus area would be to check misuse of Modvat credit, he stressed.

Earlier, speaking at the Assocham seminar, the revenue secretary cautioned against large scale tampering with tax laws to redress the grievances of various sectors of industry.

He added that the sector specific special need of any particular industry should be met through outright subsidy rather than tax reliefs and exemptions.

He expressed his opinion against the tax incentives being given to various sectors of industry like infrastructure, exports, information technology and small scale sector. There would be no competitiveadvantage if the tax concessions were made so widebased.

Referring to issue of ongoing economic liberalisation, he said "it is important that revenue remain reasonably buoyant if liberalisation is to continue."

He was also of the view that a transparent and uncluttered tax regime would put an end to rampant use of discretion exercised by the tax officials and lead to better accountability in tax administration.

In the coming days, he said, the tax department would shift its focus from assessments to non-intrusive methods of investigations through random scrutiny of cases.

Chairman of the Central Board of Direct Taxes (CBDT) Ravi Kant, pointed out that board was giving top priority to allotting PAN numbers. It has become mandatory for people to quote PAN numbers on various categories of high value transactions.

He added that the number of tax payers was likely to go up from 1.2 crore to about 1.40 crore by the year end.