The government could find it difficult to meet even its lowered tax revenue collection target for 2009-10, but a poor utilisation in some of the key schemes could ensure that it would not need to borrow more and stay within the budgeted fiscal deficit.
The government admitted in reply to a question in Rajya Sabha that utilisation by flagship schemes remained poor in the current fiscal, only 62.4% by the end of December 2009.
The net direct tax collections for the first 11 months of the current fiscal (April-February, 2010) was Rs 2,78,373 crore. The fourth quarter advance tax payment may not be enough to make up the over Rs 1 lakh crore needed to meet the Rs 3.87 crore revised target for 2009-10.
Initial trends indicate it may be an uphill task to collect more than Rs 1 lakh crore in March, a government official told ET, adding that the revenue department, the Central Board of Direct Taxes and the Central Board of Excise and Customs were monitoring the tax collections very closely.
The government is unlikely to be unduly worried as many of its schemes are may find it difficult to spend their budgetary allocation.
I dont know why a scheme such as the Pradhan Mantri Gram Sadak Yojana should do pretty okay, while one like the National Rural Employment Guarantee Scheme should not.
Performance of JNNURM has also been disappointing, Planning Commission secretary Sudha Pillai had told News recently.
The mid-term appraisal of the eleventh five year plan, which is expected later in the month, would throw more light on the performance issues.
The government had revised its tax collection estimates for 2009-10 to Rs 4,65,103 crore, Rs 9,115 crore lower than the budget estimate of Rs 4,74,218 crore.
It had raised the direct taxes collection target to Rs 3,87,000 as against budget estimate of Rs 3,70,000 crore but lowered that for indirect taxes to Rs 2,44,477 crore. It seems the government may find it difficult to meet the revised target for both, though the final collection for direct taxes could be more than Rs 3,70,000 crore budgeted initially.
The indirect tax collection data for February is still being compiled by the ministry but the initial trends are not very encouraging, an official said pointing that the collections may catch up in March.
The total indirect tax collection for April 2009 -January 2010 was Rs 1,88,580 crore (this includes service tax collection for December and not collection for January as data comes with a month lag). However, customs collections may provide some respite in this case following reimposition of customs duty and excise duty on fuels.