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Budget 2018: Govt shuns tall FY19 targets despite additional RBI transfer

FY18 collections lower despite additional RBI transfer

Indivjal Dhasmana 

Budget 2018

Having set an ambitious target in 2017-18, the seems to have turned realistic on garnering for 2018-19. On the revenue side, a slippage in projected collections was the major factor for the exceeding by 0.3 percentage points the set under the fiscal consolidation road map for 2018-19.

The 13.5 per cent shortfall in non-tax revenue collections (over the Estimates) has occurred in FY18 despite the fact that the Reserve Bank of India (RBI) transferred an additional Rs 100 billion to the In all, RBI has transferred surpluses of Rs 406.59 billion (Rs 306.59 had been transferred earlier), which was, however, lower than the Rs 600 billion projected in the Estimates (BE).  

As a result, the projected a modest rise of a 3.8 per cent (Rs 2.45 trillion) in non tax revenues for 2018-19 even on the lower base of RE of 2017-18. If the BE of 2017-18 is taken into account the revenues will be lower by 15.1 per cent for 2018-19. 


The projected Rs 2.9 trillion to come from for the current financial year, but is now expected to get only Rs 2.3 trillion. Had the met its non-tax revenue target, the fiscal deficit would have been contained at the targeted 3.2 per cent of GDP or even lower. 

Budget 2018: Govt shuns tall FY19 targets despite additional RBI transfer
The transfer of surplus from RBI, dividends from public sector banks and financial institutions would give the exchequer just Rs 548.2 billion in FY19, only Rs 21 billion higher than what it is likely to get in in the current financial year. This means that the does not expect much from struggling banks despite a Rs 800 billion recapitalisation programme.
 
Public sector units are projected to give lower dividend to the at Rs 524.9 billion next financial year against what was expected in FY18. 


The gives a combined figure for RBI, public sector banks and financial institutions dividend to the That was pegged at Rs 749 billion in BE but the received only Rs 516.24 billion. 
 
The had also asked public sector enterprises to pay more dividend to it, but they rather paid Rs 548 billion, lower than Rs 675.29 pegged in the 2017-18 Estimate. 

Telecom spectrum sales did not deliver much either.

Mind the gaps
  • Rs 406.59 billion surpluses transferred by the RBI in total lower than Rs 600 billion projected in Estimates
  • Rs 2.3 trillion is the amount the will get from against a targeted Rs 2.9 trillion
  • Rs 548.2 billion is the amount the transfer of surplus from the RBI, dividends from public sector banks and financial institutions the exchequer would get in FY19
  • Rs 524.9 billion dividend projected to come from public sector units in FY19
  • Rs 516.24 billion dividend received from the RBI, public sector banks and financial institutions dividend in FY18. It was pegged at Rs 749 billion in Estimates
Data
Source: 2018-19

First Published: Fri, February 02 2018. 05:20 IST
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