How a jump in tax revenue is giving some breathing room to govt
The government is expecting a Rs 3-3.5 lakh crore jump in tax revenue in the current fiscal year as per revised estimates of accounts for FY23 that will be presented in the February budget, a report in The Economic Times has said.
Improved compliance, post-pandemic economic recovery and high inflation have bolstered collections with both direct and indirect taxes contributing to the rise, the report said.
That's an increase of 10.9-12.7% over the budget estimate of Rs 27.6 lakh crore for gross tax collections for the year.
What were the estimates in the budget presented earlier this year?
Finance minister Nirmala Sitharaman had pegged gross tax revenue of Rs 27.6 lakh crore in FY23, up 9.5% from the revised estimate of Rs 25.2 lakh crore in FY22 when she presented the budget for the current fiscal year in February.
How do tax collections look like till date?
According to latest data, as of November 10, gross direct tax collections surged 30.7% from a year earlier, to Rs 10.54 lakh crore.
GST revenue is up an equally robust 29.7% so far this fiscal at Rs 10.5 lakh crore. Nominal gross domestic product (GDP) was up 26.7% on-year in the June quarter, almost double the 13.5% growth in real terms.
Gross tax collections surged past budget estimates in FY22 as well, coming in at Rs 25.2 lakh crore in the revised estimate against the budgeted Rs 22.2 lakh crore.
How will the surge in revenues help the government?
The revenue surge will help the government meet a spike in subsidy bills because of the rally in global food, fertiliser and fuel prices.
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