Even as tax revenues picked up during January, the government’s cumulative gross and net tax revenues posted a contraction during April-January, declining by 2 per cent and 2.1 per cent, respectively, data released by Controller General of Accounts Friday showed.
With this contraction, meeting the Revised Estimates would be a stiff aim for the government, as for the remaining two months of this fiscal gross tax revenues need to clock a growth rate of 22.1 per cent and net tax revenues need to grow at a steep rate of 70 per cent over the previous year.
Direct tax collections during April-January have declined 4.9 per cent to Rs 7.45 lakh crore, which accounts for 63.7 per cent of the Revised Estimate for the full financial year. The government now needs to collect 36.3 per cent, or Rs 4.24 lakh crore, in the remaining two months, a task which would be tough given the average monthly direct tax collections have, so far, stood at around Rs 75,800 crore in this financial year.
The government has, so far, in the 10 months of this fiscal garnered 66.3 per cent of the net tax revenue estimated in the revised estimates of this fiscal as against 68.7 per cent of the full year estimate previous year. With the government restricting expenditure in January-March to 25 per cent of the estimate for the full financial year, compared with the earlier norm of 33 per cent, the government has a limited window to spend in February and March, with the total expenditure compression expected to be over Rs 2 lakh crore. Taking into account expenditure compression, the usual trend of revenue collection in the last quarter and the expected from the proposed Vivad se Vishwas scheme, the government’s net tax collections are likely to fall short of the revised estimate.
The government’s total receipts during April-January period of current fiscal stood at Rs 12.82 lakh crore, with tax revenue at Rs 9,98,037 crore, while non-tax revenue stood at Rs 2,52,083 crore. Non-debt capital receipts stood at Rs 32,737 crore, which includes Rs 18,351 crore of disinvestment proceeds. Rs 5,30,735 crore has been transferred to state governments as ‘devolution of share of taxes’ by the Centre in same period, which is Rs 11,003 crore lower than the previous year.
For April-January, total expenditure was Rs 22.68 lakh crore, or 84.1 per cent, of Revised Estimates, of which Rs 20,00,595 crore is on revenue account and Rs 2,67,734 crore is on capital account. Out of the total revenue expenditure, over Rs 4.71 lakh crore is on account of interest payments and over Rs 2.62 lakh crore is on account of major subsidies.
During April-January, the fiscal deficit touched 128.5 per cent of the whole-year Budget target. The deficit in the year-ago period was 121.5 per cent of the corresponding target. The government has targeted to restrict the fiscal deficit (RE) at Rs 7,66,846 crore for the year ending March 31, 2020. In the Union Budget for 2020-21, presented in Parliament earlier this month, Finance Minister Nirmala Sitharaman had raised the fiscal deficit target to 3.8 per cent of the GDP, from earlier estimate of 3.3 per cent for 2019-20 due to revenue shortage.