India Union Budget: In addition to fiscal deficit, interest and subsidy payments, tax collection, revenue deficit and states' share in central taxes are some of other key figures that one should not miss.
Indian Union Budget 2019: Union budget is not only a statement of the Union government’s income and expenditure for the next financial year as mandated by Article 112 of the Constitution but it also contains important policy direction for the country’s economy. It contains voluminous information about the government’s total tax and non-tax collection, its expenditures, total borrowings, subsidy and interest payments. These are some of the most important budget numbers in addition to the fiscal deficit that no one should miss.
Net tax collection of the Union
Nirmala Sitharaman has projected the Centre’s net tax collection in FY 2019-20 at Rs 16.50 lakh crore. It will be an increase of 11.12% over the tax collection during the last year which was Rs 14.84 lakh crore as per the revised estimates. It’s a challenge as GDP growth has registered a sharp decline in the last quarter of previous fiscal. The task becomes even more daunting as the Centre’s tax collection fell short by Rs 1.66 lakh crore, from Rs 14.84 lakh crore to 13.17 lakh crore as per the controller general of accounts data.
Nearly one-fourth of the Union budget goes into interest payment alone. According to budget documents, this year the Union government’s interest payment liabilities are projected to be over Rs 6.60 lakh crore. It’s nearly 95% of the government’s total borrowings requirement this year which is pegged at Rs 7.03 lakh crore. The government’s interest payment outgo was Rs 5.87 lakh crore last year and this year is is expected to increase by over 12%.
The Union government’s subsidy bill on three major heads – food, fertiliser and petroleum has been projected at Rs 3.02 lakh crore. Food subsidy accounts for the biggest chunk in the subsidy bill with a total outlay of Rs 1.84 lakh crore, fertiliser subsidy accounts for Rs 80,000 crore and subsidy on sale of petroleum products like subsidised kerosene and domestic gas accounts for Rs 37,478 crore. Government’s subsidy bill on the three major heads is expected to be higher by over Rs 35,000 crore in comparison with its subsidy bill on three major heads during the previous fiscal.
State’s share in the central taxes
Nirmala Sitharaman has projected the Centre’s gross tax revenue collection at Rs 24.61 lakh crore, an increase of over 9% over the last year’s figure. However, nearly one-third of it will be transferred to states’ share in the central taxes. This year central government will transfer Rs 8.09 lakh crore directly to state governments as part of their share in the central taxes. It is an increase of Rs 48,000 crore or 6% over the previous year’s figure. Share of states in the central taxes has gone up from Rs 6.73 in 2017-18 to Rs 7.61 lakh crore in 2018-19.
Revenue deficit is the shortfall between the government’s revenue expenditure and its revenue receipts. In budget documents, it is presented both in terms of absolute numbers and also as a percentage of the country’s GDP. Nirmala Sitharaman has projected revenue deficit to be Rs 4.85 lakh crore or 2.3% of the GDP this year. It’s an increase of Rs 74,000 crore over the last year’s revenue deficit which was Rs 4.11 lakh crore.