The government has estimated a tax revenue shortfall of Rs 55,000 crore for the fiscal year 2017-2018 and may consider breaching the fiscal deficit target by 20 basis points, ET Now reported quoting sources. For the current fiscal, the government has estimated a direct tax revenue shortfall Rs 20,000 crore and an indirect tax revenue shortfall Rs 25,000 crore- 35,000 crore.
Taking into consideration the estimated tax revenue shortfall for the current fiscal, the government is considering two options, the decision on which will be taken by January end. First, the government may consider breaching the fiscal deficit target by 20 basis points; second, the government may expect the Reserve Bank of India and the Public Sector Undertakings (PSUs) to pay an additional dividend. Rising crude oil price, which is presently hovering around $65 per barrel, is also one of the reasons for the fiscal slippage.
The government has fixed fiscal deficit target to 3.2% of the GDP in the current fiscal as against 3.5% in 2016-17. In absolute terms, 3.2% deficit for the current fiscal works out to nearly Rs 5.47 crore. The fiscal deficit at the end of October hit 96.1% of the Budget, with five more months still at hand. Meanwhile, the GST collections also slowed down for two consecutive months due to the rate rationalisation of over 170 goods and services.
It was earlier reported that the government wanted the RBI to release its entire surplus of Rs 43,000 crore as dividend for funding its massive Rs 2.11 lakh crore bank recapitalisation plan, of which Rs 76,000 crore will be through budgetary allocation and market raising.
The RBI is entitled to pay a dividend to the government of India under Section 47 (Allocation of Surplus Profits) of the Reserve Bank of India Act, 1934. The Reserve Bank had halved its dividend payout to the government to Rs 30,659 crore for the fiscal ended June 2017, citing lower surplus. The government had pegged Rs 74,901.25 crore as a dividend in FY17. The government was earlier stated to be expecting Rs 58,000 crore in dividend from the RBI in FY18.