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Dividend from Reserve Bank of India enabled the Government to achieve nearly half of non-tax revenue receipt in just two months of the current fiscal, data from Controller General of Account (CGA) revealed on Wednesday.
This along with better tax collection, helped the Government to limit the fiscal deficit to 8.2 per cent of budget estimate during first two months against 58.6 per cent during FY 21.
The Government has set a target of Rs over Rs 2.43 lakh crore to be collected as non-tax revenue out of which dividend and profit from public sector companies, RBI, nationalized banks and financial institutions have major share of over Rs 1.03 lakh crore. On May 21, RBI decided to transfer Rs 99,122 crore as surplus to the Central Government for the accounting period of nine months ended March 31, 2021 (July 2020-March 2021). Though CGA has not specifically mentioned name of RBI, but amount of Rs 99,628.33 crore showed under ‘Dividend & Profit’ as part of non-tax revenue clearly indicated transfer from RBI.
Tax collection during April-May also showed better growth mainly in account of record GST collection in April and Rs 1 lakh crore plus in May. Aditi Nayar, Chief Economist with ICRA said that Tax revenues stood at Rs. 1.4 lakh crore in May 2021, which is very high relative to even the pre-covid levels of Rs. 0.9-1 lakh crore for the month of May in 2017-2019.
“Given the moderate growth of 9.5 per cent embedded in the GoI’s FY2022 Budget Estimates for gross tax revenues (relative to the provisional actuals for FY2021), relative to our expectation of a nominal GDP expansion of 15-16 per cent in the current fiscal, we do not foresee a material undershooting of the targeted tax collections, even with some eventual reduction in excise duty on fuels,” she said.
Moreover, the higher than budgeted transfer of surplus by the RBI in FY2022 and prepayment of the FCI's liabilities of around Rs. 1 lakh crore in FY2020-21, provide a cushion of around Rs. 1.5-1.6 lakh crore. This should be adequate to cover the costs related to the free foodgrains and enhanced fertiliser subsidy of Rs. 1.1 lakh crore, and the aforesaid fresh outlay of Rs. 0.5-0.7 lakh crore for FY22 for the Economic Relief package.
Therefore, “the magnitude by which the GoI’s fiscal deficit in FY2022 will overshoot the Budget Estimate of Rs. 15.1 lakh crore, will depend on how much of the disinvestment target of Rs. 1.75 lakh crore remains unachieved at the end of this year. Another factor is the extent by which the outlay of Rs. 35,000 crore for vaccine procurement is exceeded, which may be necessary to achieve early availability of vaccine imports,” Nayar said.
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