Chennai: Tax revenues of FY24 is expected to be 5 per cent higher than the budget estimate and 17.2 per cent higher than last year’s revenues. Non-tax revenue too is likely to be 23 per cent higher than the budget estimate.
Tax revenue during April-October 2023 has been Rs 13 trillion against Rs 11.7 trillion in the year-ago period. This is 59.6 per cent of the FY24 budget estimate.
India Ratings expects it to reach Rs 24.5 trillion in FY24, five per cent higher than the budgeted Rs 23.3 trillion. It would also be 17.2 per cent higher than Rs 20.9 trillion in the previous fiscal.
Non-tax revenue is also expected to come in higher than the budgeted figure in FY24. Non-tax revenue is forecasted to reach Rs 3.7 trillion in FY24 as against the budgeted Rs 3 trillion, up 23.3 per cent.
However, capital receipts are lagging and were Rs 229.9 billion during April-October 2023 which is only 27.4 per cent of the FY24 budgeted amount.
Like in the past, the government this year is struggling to achieve the disinvestment target, despite it being a modest Rs 510 billion for FY24. Till October 2023, the total disinvestment proceeds have been just Rs 80 billion, which is only 15.7 per cent of the target.
Despite higher tax and non-tax revenue collection, fiscal deficit of FY24 is expected to inch up to 6 per cent, higher than the budgeted deficit, due to higher revenue expenditure and lower-than-budgeted nominal GDP.
The government will end up spending more on prioritised areas such as food, fertiliser and LPG subsidy and National Rural Employment Guarantee Scheme. As against the budgeted nutrient-based fertiliser subsidy of Rs 440 billion, the union government has now increased the fertiliser subsidy to Rs 573.6 billion as the budgeted amount was almost over by end-October 2023, according to India Raings.
Similarly, realising the sustained demand for employment under Mahatma Gandhi National Rural Employment Guarantee Programme whereby a sum of Rs 797.7 billion has already been spent till 19 December 2023 as against the budgeted Rs 600 billion, an additional sum of Rs 145.2 billion has been allocated through the first supplementary demand for grants.
This will see the fiscal deficit inching up to 6 per cent of the GDP, 10 bp higher than budgeted 5.9 per cent.
