Internal assessment by Modi govt suggests gross tax revenue for 2019-20 to fall short by ₹2 lakh crore

The gross tax revenue for the 2019-20 financial year may fall short by around ₹2 lakh crore, revealed an internal assessment by Modi govt. Union Budget for 2019-2010 had predicted the revenue to be around ₹24.6 lakh crore, reported Business Standard.

According to this report in Business Standard, internal assessment report was informally shared with the 15th Finance Commission, unidentified officials said. Finance commission had asked the Ministry of Finance to give it a revised memorandum, due to the growth slowdown and present economic crisis.

As against the estimated projected figures for 2018-19 of ₹22.7 lakh crore, the actual gross tax falls to ₹20.8 lakh crore.

Out of the gross tax revenue of ₹24.6 lakh crore being estimated for the year 2019-2020, the net-to-Centre tax revenue estimate stands at ₹16.5 lakh crore.

Devolution, GST compensation, the share of integrated GST and other items are estimated to be around ₹8.1 lakh crore, and the net-to-Centre tax revenue estimate stands at ₹16.5 lakh crore. India’s fiscal deficit, thus, will fall up to 4% of Gross Domestic Product, as against the budgeted 3.3%.

The Reserve Bank of India has estimated that growth will fall to 6.1% for the 2019-20 financial year.

A mere rise of 5% Direct tax collection was seen in the first half of the 2019-20 financial year. It ought to rise at nothing less than 27% in the second half of the year to achieve the government’s target of 17.3% growth.

The report also forecasts a fall in the GST collection, news website Scroll.in reported. Union Minister Nirmala Sitharaman’s decision of cutting the corporate tax rate down from 35% to 22% would lead to the much-feared massive fiscal slippage in the 2019-’20 financial year.