Tax Receipts

The indication of a slippage in the fiscal deficit of the union government in 200001 from the budget estimates for the year would not have evoked much surprise or attention but for the fact that much of the hype about the central budget for this year was built around the achievement of the deficit target, viz, 5.1 per cent of GDP. It now transpires that the deficit will be up by at least 0.2 percentage points because of a shortfall of as much as Rs 9,000 crore in revenue receipts: Rs 8,000 crore in tax receipts and Rs 1,000 crore on account of failure to reach the disinvestment target.

Variation of ‘revised estimates’(RE) and ‘actuals’ from ‘budget estimates’ (BE) are a regular feature of budgets in India, both at the centre and in the states. Poor ‘fiscal marksmanship’ of the state governments has been a subject of attention from the RBI. The central budgets too are marked by variations of the actuals from the budget estimates every year, though not to the same extent as in the case of some of the states. The shortfalls in revenue receipts from RE reported this year go beyond the past pattern and raise questions about the integrity of the centre’s budget too.