NEW DELHI: When the government recently softened tax rates on 23 items with an eye on the general elections, it had anticipated a healthy Goods and Services Tax (GST) mop-up to bridge the yawning revenue gap. But contrary to expectation, it ended up collecting about Rs 3,000 crore less in December that it had in November.
While the GST figures for December stood at Rs 94,726 crore, the November kitty was healthier at Rs 97,637 crore.
In all, the net tax receipts for eight months of FY19 stood at Rs 7.32 lakh crore, marginally higher than last year, but much below the budgeted target of 19.1% growth. At this rate, the government would be staring at a revenue shortfall of Rs 1.85 lakh crore, which would be 1 per cent of GDP - too wide a gap to be filled by an increase in direct taxes.
A slew of populist schemes ahead of the polls would further hurt the bottomline. Revenue expenditure climbed to Rs 14.21 lakh crore or over two-thirds of the budget estimates. During April-November, loans disbursed crossed Rs 14,400 crore, which is 66.2% of the budgetary estimates.
The overall expenses on major subsidies rose to Rs 2.19 lakh crore by April-November, which is 83% of the budgetary estimates.