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Rise in revenue by over 100 per cent rise and lower expenditure restricted the fiscal deficit to ₹4.7-lakh crore, which is 31 per cent of Budget Estimate (BE) in April-August period.
Now, experts feel that tax collection for full fiscal is expected to go up to ₹2-lakh crore as against BE. Also, expectation is that fiscal deficit will be lower than BE.
Latest data released by Controller of General Accounts (CGA) showed total revenue (from tax and non-tax sources) was over ₹7.93-lakh crore in April-August against over ₹3.70-lakh crore in corresponding period in last fiscal, a growth of over 114 per cent. However, total expenditure was over ₹12.77-lakh crore against ₹12.48-lakh crore in the same period, a growth of just 2.3 per cent.
Buoyant tax collection
Net tax collection moved up to ₹8.6-lakh crore during first the five months, a growth of 70 per cent on a collection of over ₹5.04-lakh crore. All major taxes such as corporate, personal income tax, custom duty and Centre’s share in Goods & Services Tax, showed buoyancy.
Aditi Nayar, Chief Economist with ICRA, said the healthy expansion in the Centre’s gross tax revenues in the first half relative to the pre-Covid level augurs that the upturn will sustain in the second half as well, even though a normalising base may dampen the pace of growth going forward. “We expect the GoI’s gross tax revenues to exceed the FY22 BE by at least ₹2-lakh crore,” she said.
The transfer of surplus by the RBI to the government is around ₹50,000 crore higher than budgeted.
Moreover, “we expect modest inflows to commence in FY22 from the National Monetisation Pipeline (NMP). However, following the Centre’s package for the telecom sector, we assess the inflows from this sector into the GoI's FY22 non-tax revenues to be limited to ₹28,000 crore, trailing the budgeted ₹54,000 crore,” she said.
Nayar expects the total expenditure to exceed the FY22 BE by around ₹50,000-60,000 crore. “The GoI’s fiscal deficit in FY22 is likely to be lower than budgeted, the extent of which will be driven by the size of the disinvestment inflows that are eventually realised,” she said.
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