Borrowings have already crossed 75 per cent of the Budget estimates, and nothing substantial has been achieved on the divestment front from which a hefty Rs 12,000 crore was targeted.
According to the finance ministry officials, if the current trend persists during the second half, it would lead to a much higher fiscal deficit at the end of this financial year than the projected figure of 4.7 per cent of the GDP. They also said the fate of the Budget calculations is now heavily dependent on a pick-up in tax collections during the second half. The target for tax collections during the fiscal has been pegged at Rs 2,26,649 crore as against the revised estimate of Rs 1,98,321 crore during 2000-01. However, due to a shortfall of over Rs 10,000 crore from the revised estimate last fiscal, the additional tax to be collected this fiscal stands at around Rs 39,000 crore. The actual growth target from the past fiscals tax mop-up thus is 20 per cent, which in itself is quite stiff.
Sources further said with a possible reversal of the slowdown being at least two quarters away, a major boost in tax collection is highly unlikely during the remaining half, which may lead to a tax shortfall of around Rs 15,000-20,000 crore.
They also revealed that direct tax collection during the H1 has been around Rs 24,000 crore, Rs 2,000 crore less than the past years realisation during the same period, adding the target for direct tax mop-up during H2 is a hefty Rs 60,800 crore. Similarly, in the case of indirect tax realisations, with poor customs collection and a lower 4-5 per cent growth in excise realisation, the collections form this segment are estimated to be around Rs 51,000 crore during the H1. This leaves around Rs 90,000 crore, including service tax, to be collected from indirect taxes during the next half, pointed out the sources.
They also said though excise duty collection is set to pick up during the coming months due to festivals, customs collection will continue to remain poor due to the ongoing downturn and a further decline in exports and imports in the aftermath of the last months terror strikes on the US.
On the expenditure front, though total expenditure at the end of August was at 31.5 per cent of the Budget estimate, which was similar to the past years figure during the same period, governments borrowings reached an alarming 75.6 per cent of the estimate on October 10.
On the divestment front, the sources pointed out that CMC and HTL together would fetch the government a paltry Rs 207 crore only, and that chances of any major selloff during the remaining half is highly unlikely. This will amount to another substantial shortfall in government receipts.
Further, a lower GDP growth would also push the deficit upwards. The Confederation of Indian Industry in its recent forecast has said the GDP growth for the fiscal 2001-02 was unlikely to exceed 5.25 per cent.