After direct taxes, the finance ministry proposes to outsource some of the activities in excise and customs departments and find innovative methods to boost revenue collection to Rs 1,65,000 crore (Rs 1,650 billion) this fiscal.

"We have to collect Rs 1,65,000 crore in excise and customs... We are looking at innovative ways and outsourcing of some activities," Finance Minister P Chidambaram told reporters after his meeting with commissioners of excise and customs in New Delhi on Tuesday.

The ministry had started outsourcing of certain direct tax activities like issuing PAN cards through UTI-ISL and NSDL last year. It was also thinking of assigning the jobs of scrutiny of accounts to independent chartered accountants.

The ministry was also looking at certain legislative measures to tone up indirect tax administration, Chidambaram said.

The finance minister also gave a patient hearing to the commissioners on the problems faced by the department in some circles and identified certain issues, which were mostly at the operational level.

"We need funds for some activities and funds for infrastructure," he said.

He asked the revenue officials to recommend further steps to increase revenue. "Revenue is the heart of finance ministry. Unless we raise revenue, we can't fund development projects," he said.

Excise duties have been budgeted at Rs 1,09,199 crore (Rs 1,091.99 billion) during this fiscal compared to Rs 92,379 crore (Rs 923.79 billion) in last fiscal, while customs duties has been estimated at Rs 54,250 crore (Rs 542.50 billion) in 2004-05 compared to Rs 49,350 crore (Rs 493.50 billion) last fiscal.