With just 53% revenue target met, Budget uphill task for FM

Ruchika M Khanna
Tribune News Service
Chandigarh, February 7

As Finance Minister Manpreet Singh Badal prepares to present his Budget proposals on February 18, his main worry is the inability to match the revenue targets he had set for the current fiscal. Only 53 per cent of the revenue receipts targeted for the year have been realised so far.

The government, in its Budget proposals for 2018-19, had set a target of realising Rs 72,311.85 crore this fiscal. The fiscal indicators for the first three quarters (April-December 2018) show that the state has managed to earn just Rs 38,384.92 crore. 

  As against just 53.08 per cent of revenue receipts realised this year, the state had managed to realise 57 per cent of the estimates in the corresponding period of previous financial year.

In spite of dismal resource realisation, the state government is expected to announce some doles for the disadvantaged sections, keeping in mind the coming General Election. The state is unlikely to announce any taxes or new means of additional resource mobilisation. However, the 15th Finance Commission members, who visited the state recently, have asked the government to “better” manage their resources, so that they can meet the resource mobilisation roadmap set under the Fiscal Responsibility and Budget Management Act.

  Data accessed by The Tribune shows that the worst realisation of income has been seen in the non-tax revenue (earned through levies imposed by various departments), grant-in-aid received from the Centre and revenue generated through Goods and Services Tax (GST). While the non-tax revenue collection is 43.39 per cent of the target set in Budget estimates, the grant-in-aid have fallen and are just 36.57 per cent of the Rs 8,570.16 crore that the state was hoping to receive this year. 

  The main cause of worry is the much lower than expected GST collection. The GST collection till December is just 47.21 per cent of the target of Rs 21,440 crore.

  It may be mentioned that the state had initially decided to mop up its revenue by imposing two taxes – a development tax and a tax for funding social security schemes. The idea was to help in additional resource mobilisation to meet the resource gap (between income and expenditure). But these taxes were imposed rather late, thus adding miniscule moneys to the treasury.

With the revenue expenditure showing no signs of reduction (the revenue expenditure so far is Rs 47, 207.75 crore, 54.67 percent of target), the state will have a huge revenue deficit at the end of this financial year. The revenue deficit so far is Rs 8,822.83 crore.