Revenue receipts to face shortfall of Rs 1.1 lakh crore, says SBI report

Tribune News Service

New Delhi, October 23 

The government’s revenue receipts may face a shortfall of Rs 1.1 lakh crore and to manage the fiscal deficit, the government will need to cut expenditure substantially to the tune of Rs 70,000 crore, according to SBI Research.

Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI wrote in a note that there may be a shortfall of Rs 1.1 lakh crore in the revenue receipts. To manage the fiscal deficit, the government, however, needs to cut expenditure substantially. The report pointed out that the fiscal deficit target of 3.2% in financial year 2018 seems not difficult to meet.

“We estimate that the government may cut around Rs 70,000 crore from the capital expenditure. However, the good news is that budgeted disinvestment receipts are on track to realising Rs 72,500 crore. At current trends, it is likely that for the first time after FY10 that disinvestment target is likely to be achieved”, he added.

“At current trends, it is likely that for the first time after fiscal 2009-10 that disinvestment target is likely to be achieved,” it noted, adding even if the nominal growth declines significantly in 2017-18, fiscal deficit would be impacted by at most 10 basis points in upward direction.

The report observed that the government has accumulated a total of Rs 40,491 crore in the National Small Savings Fund during the first five months of this fiscal.

“It could thus receive Rs 1 lakh crore in small savings in FY18, and would be able to do a buyback of Rs 75,000 crore.”

Economic research estimates 

• According to estimates, while there could be a shortfall of Rs 1.1 lakh crore in the revenue receipts, disinvestments receipts worth Rs 72,500 crore and expenditure cuts are likely to offset the impact
• The government may cut about Rs 70,000 crore from the capital expenditure 
• At current trends, it is likely that for the first time after fiscal 2009-10 disinvestment target is likely to be achieved