The Centre's share of GST collection in May showed a 107 per cent jump month-on-month as collections increased from Rs 16,707 crore in April 2020 to Rs 34,731 crore in May 2020. However, this is still Rs 15,000 crore lower than the GST collection in May last year.
Centre's collection trends shows that the overall GST collection (Centre and states) in May 2020 could have been close to Rs 70,000 crore compared to Rs 1 lakh crore last year. In April, the overall GST collection was anywhere between Rs 35,000 crore and Rs 40,000 crore.
The gross revenue collection of the Centre in May was Rs 58,553 crore against Rs 93,389 crore, showing a year-on-year contraction of 37 per cent. In April 2020, the year-on-year contraction was 44 per cent. Till May, the gross tax revenue of the Centre was Rs 1.26 lakh crore compared to Rs 2.15 lakh crore in the previous year.
Total receipts of the government up to May 2020 were Rs 45,500 crore against total expenditure of Rs 5.12 lakh crore. Thus, the total fiscal deficit up to May was Rs 4.6 lakh crore, or 59 per cent of the budgeted target. This is 27 per cent more than the fiscal deficit during the period last year.
According to an estimate by rating agency ICRA, Centre's fiscal deficit for 2020-21 could be as much as Rs 13 lakh crore or 6.7 per cent of GDP against the budgeted level of Rs 8 lakh crore or 3.5 per cent of GDP.
It further says that if the Centre has to provide funds towards GST compensation to the state governments from its own sources, its fiscal deficit would be even higher than our base case of 6.7 per cent of GDP. Usually, states are compensated for any revenue loss due to GST from collections made through Compensation Cess.
However, the compensation requirements of the states far exceed the collections through Compensation Cess.
The deficit in the budget is filled by borrowing. The government has already increased borrowings in the current financial year by Rs 4.2 lakh crore to Rs 12 lakh crore. Earlier, the government has budgeted for Rs 7.8 lakh crore borrowings.