Tax revenue have come under severe stress due to overestimation of numbers and cuts in corporation tax and goods and services tax (GST) rates. The collections had seen a temporary spike in FY17 and FY18 on account of demonetisation of high-value currency in November 2016, which led people to declare higher incomes than usual.
Among other revenue heads, meeting non-debt capital receipts is also an uphill task. One of the main items, disinvestment, saw only Rs 18,000 crore collection so far, against the target of Rs 1.05 trillion for FY20.
Non-tax revenues hold some hope due to fund transfer by the Reserve Bank of India to the government to the tune of Rs 1.76 trillion and the Supreme Court's ruling on telecom companies’ payments to the exchequer. As the government struggles for revenues, the axe could fall on capital expenditure and on subsidies part of the revenue expenditure, which might be cut or rolled over to next year. Besides, borrowing by the Food Corporation of India from the National Small Savings Fund is an option.
StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines. Compiled by BS Research Bureau