A hand-to-mouth Budget -Puja Mehra
It is inescapable from the arithmetic that revenue expenditures and tax revenues are in need of serious corrections
Finance Minister Nirmala Sitharaman began a new practice in the Union Budget, presented on July 5, when she relegated the numbers, or the budgeting, to the fine print, in a break with tradition; they are usually presented as a part of the speech on the floor of the House in Parliament.
What are the compulsions that could have made her shy away from stating the numbers as her predecessors have done earlier, no matter how uncomfortable the fiscal position?
Falling tax revenues
The Central government’s tax revenues for the financial year ending March-end 2019 — as reported by the Controller General of Accounts (CGA) — fell short of the Interim Budget’s estimates (that the Modi government presented in its first tenure) in February by a whopping 0.9% of GDP.
The CGA’s figures show that direct tax collections for 2018-19 fell short by Rs.74,774 crore while those of indirect tax collections were by Rs. 93,198 crore.
The Budget Speech saved the Modi government the embarrassment of owning up to this shortfall on the floor of the House, although this is not the first time that a government has overestimated tax collections.
Ms. Sitharaman has now budgeted for lower tax revenue in the ongoing financial year, 2019-20, than her predecessor, Piyush Goyal had in the Interim Budget.
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