Challenges before Narendra Modi, Arun Jaitley ahead of Budget 2019
Shortfall in GST collections, telecom sector revenues, divestment revenues and some shortfall in direct tax receipts (going by the caution displayed by CBDT chairman recently) could upset the targeted budgeted revenues.
The Naendra Modi government is going to present its last budget on February 1 and all eyes will be on Finance Minister Arun Jaitley as to what announcement he is going to make for the public to make the general budget a smooth sail for his party and its allies. In fact, the opposition too would be having a close eye on this budget as they have done the same in 2014 when they were on the ruling bench in the parliament.
Commenting upon what we can expect from the Modi government in upcoming budget Dhiraj Relli, MD & CEO, HDFC Securities told in a written statement, "Shortfall in GST collections (despite customs duty revenues being better than budgeted, net indirect tax receipts till November were only 49.4 per cent of estimates compared with 57 per cent last year), telecom sector revenues, divestment revenues and some shortfall in direct tax receipts (going by the caution displayed by CBDT chairman recently) could upset the targeted budgeted revenues. This might happen at a time when the expenditure may overshoot budgeted numbers (including fertilizer subsidies which alone could be closer to Rs 1 lakh cr versus Rs 0.70 lakh cr budgeted). While some shortfall may be recouped from higher RBI dividends, a minor overshooting of fiscal deficit (easily justifiable as usual, due to unpredictable events) is likely unless severe expenditure cuts are undertaken (which does not seem likely ahead of general elections)."
Standing in sync with HDFC CEO views; Anindya Banerjee, Analyst, Kotak Securities told Zee Business online, "The government of India is facing huge pressure on GST revenue collection front. They are falling short by around Rs 20,000 crore in GST revenue collection as it still around Rs 90,000 crore to Rs 95,000 crore while the targeted GST collection was around Rs 1.1 lakh crore. So, in coming days the government will have to face rising fiscal deficit which it targeted to contain below 3.5 per cent of the Gross Domestic Product (GDP)." He said that to pare that loss in GST revenue collection, the government of India can either go for foreign investment or for the disinvestment.