With fiscal math under pressure due to lower buoyancy in tax collection, the government is turning to the public sector to meet its estimates - the original ones not the optimistic revised numbers. The direct tax collections target for the current fiscal was hiked from Rs 11.50 lakh crore to Rs 12 lakh crore in the Interim Budget, but with total net collection standing at around Rs 10 lakh crore as on March 16, the taxman is scrambling for ways to at least meet the original target.
Hence, the revenue authorities have asked state-owned banks to deposit tax deducted for March, which would ordinarily be paid to the government in April, in the current month itself, a source in the know told The Economic Times. This revenue along with some savings on the expenditure front may help the government meet the fiscal deficit target of 3.4% of GDP.
The news on the GST front is not optimistic either. The government had lowered the GST collection target for the current fiscal to Rs 11.47 lakh crore in the Revised Estimates, from Rs 13.71 lakh crore budgeted initially. GST collections in the current fiscal till February totalled Rs 10.70 lakh crore - with last month's collections dropping to Rs 97,247 crore from Rs 1.02 lakh crore in January.
The government in the interim Budget had also revised customs collection target from Rs 1.12 lakh crore to Rs 1.30 lakh crore. Revised excise duty collections are pegged at Rs 2.59 lakh crore. The buzz is that there may be a total shortfall of around Rs 1 lakh crore from the Budget's estimates considering GST as well as direct tax collections.
Furthermore, it seems that the disinvestment proceeds may also fall short of the target by at least 25% of the targeted Rs 80,000 crore. The shortfall of Rs 35,000-45,000 crore is likely to stretch the deficit by 20 basis points, as Business Today previously reported. To bridge this deficit, the government has asked PSUs Indian Oil Corporation Ltd (IOCL) and Oil and Natural Gas Corp (ONGC) to dish out a second round of dividends to bridge the deficit. These two companies have reportedly already given Rs 8,400 crore dividend, bulk of which went to the government. While IOCL, in which the government owns a 54% stake, declared a second interim dividend of over Rs 1,400 crore last week, ONGC refused to budge. Previously, in mid-March, Coal India Ltd approved a second interim dividend, which according to analysts translated to about Rs 2,600 crore for the government, in addition to the over Rs 11,500 crore it received earlier.
In addition, the CBDT has reportedly been issuing an advisory asking the taxpayers to pay the fourth and last instalment of advance tax for the current fiscal, and there are apprehensions that corporates may have to pay more in the last instalment and claim refund in the next fiscal.
(With PTI inputs)