As expected, there is a huge shortfall in government revenues in the first three months of this financial year, plagued by the pandemic and lockdown. Revenue receipts in the first quarter of FY21 are less than seven per cent of the total estimates (BE FY21) for the financial year.
The Union revenue for Q1 has been just Rs 1.53 lakh crore, which forms just 6.84 per cent of this financial year BE. This includes Rs 1.34 lakh crore tax revenue (net to centre), Rs 15,000 crore plus of non-tax revenue and Rs 3,573 crore of non-debt capital receipts (which is essentially loan recovery).
This means, for the Union expenditure to balance, the next three quarters have to make up for the shortfall, which is presently at around 94 per cent, which is next to impossible.
The Centre's dire financial situation has also reflected in the tax devolution to states. At Rs 1.34 lakh crore, this is more than Rs 14,000 crore less compared to last year. With a government panel already sounding out the fact that the centre may just not have enough money to pay the GST due to states, this delicate situation is likely to lead to further centre-state confrontation, especially with opposition-ruled states.
Total expenditure of the government in this period is Rs 8.16 lakh crore, which takes up 26.82 per cent of the best estimate for this financial year—compared to money coming in forming less than seven per cent of the estimates. Out of the total expenditure, Rs 7.27 lakh crore is revenue account and Rs 88,000 core plus on capital account. Out of the total revenue expenditure, Rs 1.6 lakh crore rupees is on account of interest payments and nearly Rs 79,000 crore on account of major subsidies. These figures were released by the finance ministry on Friday evening.