The FY21 Union Budget will be challenging as the economy is likely to contract 7.7% in FY21, for the first time in 41 years; tax collections and proceeds are likely to fall short of the target. The Budget for FY21 had estimated tax collection of Rs 24.23 lakh crore and apportioned Rs 2.1 lakh crore from disinvestment. However, data from Controller General of Accounts show total tax collection for FY21 till November was just Rs 10.26 lakh crore – 42% of the budget estimates. Within direct tax, corporate tax collection has been just 27% of Rs 1.86 lakh crore of Rs 6.8 lakh crore estimated in the budget. Personal income tax collection at Rs 2.35 lakh crore has been around 37%. Goods and services tax collection is around 36%. Notably, collection from Union excise duties has been Rs 1.96 lakh crore, which is around 75% of the budget estimates. The mop-up from disinvestment in recent years has been low as sales have proven difficult. Till December 2020, the government could raise only Rs 15,220 crore out of the Rs 2.1 lakh crore target. The government will have to go for a massive asset-monetisation drive to raise funds for investment in infrastructure.
