JOIN USCentre may exceed its FY22 tax collection target by a broad margin
For the first time ever, the Centre may exceed its tax collection target for the current financial year by a broad margin and therefore see a significant fall in the fiscal deficit, a number that is watched closely by almost every stakeholder in the economy and lends credibility to the government's finances.
The tax revenues are expected to do better even when compared with the pre-Covid year of 2019-20.
The tax collection target for fiscal 2021-22 ending March 31 next year was set at Rs 22.2 lakh crore. The official data shows the tax collected to date (both direct and indirect taxes) stands at nearly Rs 19 lakh crore.
With four months still remaining for the tax revenues to be collected in the current financial year, the tax revenue collection is likely to exceed the target by a wide margin.
Data shows the net direct tax collections from April to mid-December were above Rs 9.45 lakh crore compared to Rs 5.88 lakh crore over the corresponding period of the financial year 2020-21, representing an increase of 60.8%. The net collection in 2021-22 is 40% higher than the net direct tax revenues of a pre-Covid period of 2019-20.
The gross collection of direct taxes (before adjusting for refunds) for fiscal 2021-22 till mid-December stood at Rs 10.80 lakh crore compared to Rs 7,34 lakh crore in the corresponding period of the preceding financial year. The gross collection for the financial year 2019-20 (pre-Covid year) was Rs 8.34 lakh crore, the data showed.
Goods and Services Tax revenues in eight months of the current financial year until November 30 were above Rs 9.35 lakh crore.
The government had budgeted a 9.5% growth in tax collections at Rs 22.2 lakh crore for the 2021-22 fiscal (April-March).
"Better enforcement by the government and compliance by the taxpayers have made it possible," an official told DH, adding the stronger revenue buoyancy will better India's fiscal deficit this year, which could be around 6.5% of GDP against the projected 6.8% even if the target on a major item of disinvestment on the non-tax revenue side is not met.
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