Centre’s tax revenue may fall short of target

The Centre’s tax revenue collection may fall short by a little over Rs 2.5 lakh crore in the financial year 2020-21 against the target of Rs 24.2 lakh crore.

This is because the economy has slowed due to the Covid-19 pandemic and it is heavily dependent on the Goods and Services Tax collection, which has topped Rs 1 lakh crore for the second consecutive month in November.

The tax collection in the April-September period this year has been only Rs 7.6 lakh crore but the finance ministry officials are hopeful of reaching the target or fall short only marginally.

“The economy is recovering better than expected and we are hopeful of a better tax revenue collection in the second half of the year. The enhanced GST collection for the second month in a row gives ample hope,” an official told DH.

Revenue from GST stood at over Rs 1.04 lakh crore in November as against Rs 1.05 lakh crore collected in the previous month.

The collection in November 2020 is 1.4% higher than in November 2019 when the GST mop-up was Rs 1,03,491 crore.

The government tax and non-tax revenue collection dipped in 2020-21 majorly due to the nationwide lockdown since May, which reopened partly since June but many small businesses remained shut.

Official data, however, showed year-on-year contraction in tax collections narrowed to a little over 13% in July-September from 32.6% in April-June period.

Sources in the know also said the government may speed up the disinvestment process in the remaining four months of the financial year 2020-21 in order to mop up non-tax revenues, which are also expected to fall short of the target majorly.

Finance Minister Nirmala Sithraman recently told business leaders that the government’s stake sale programme will accelerate in coming days. In this year’s Budget, the finance minister had set a target of Rs 2.1 lakh crore for disinvestment for 2020-21 but has so far managed just above Rs 6,100 crore due to the pandemic