Sources said the increased tax buoyancy, as reflected in both income tax and GST monthly collection data, provides the government an opportunity to allocate more funds for farmers and social sector schemes in the upcoming interim budget without sacrificing fiscal prudence. Will do.

The focus in the interim budget, which will be the last major economic document of the Modi 2.0 government before the general elections, is likely to be on the issues faced by the poorer sections of the society, especially in rural areas.

According to sources, income and corporate tax collections are showing a bounce in the current financial year, and total direct tax collections are likely to exceed the budget estimate by about Rs 1 lakh crore.

The government had budgeted to raise Rs 18.23 lakh crore from direct taxes in this financial year. As of January 10, the collection stood at Rs 14.70 lakh crore, which is 81 percent of the budget estimate.

On the Goods and Services Tax (GST) front, Union GST revenue is expected to be about Rs 10,000 crore higher than the Budget estimate of Rs 8.1 lakh crore. According to estimates, there will be a shortfall of about Rs 49,000 crore in excise duty and customs duty collections this financial year.

The Centre’s gross tax revenue is expected to be Rs 60,000 crore more than the budget estimate of Rs 33.6 lakh crore.

ICRA in its interim budget expectations report had said it expects gross tax revenue to grow by 11 per cent in the next financial year (2024-25) due to direct tax and GST collections, although excise and customs duty collections are likely to increase. Is. to control.

“With ICRA’s nominal GDP growth forecast of 9.5 per cent, the tax buoyancy in FY2025 is assumed to be a healthy 1.2 (versus 1.4 expected for FY2024), lower than that seen during FY2015-19,” ICRA said. This is in line with the historical average.”

This tax surge will allow the government to allocate more funds to social sector schemes like MNREGA, rural roads, PM Kisan Samman Nidhi, PM Vishwakarma Yojana without deviating from the fiscal consolidation path of reducing fiscal deficit to 4.5 per cent by 2025-26. Has given scope. ,

Fiscal deficit, which is the difference between government receipts and expenditure, is estimated at 5.9 per cent of GDP in the current financial year.

Sanjay Kumar, partner, Deloitte India, said that at present the government has some fiscal space and they would like to spend it.

This government has not committed any kind of negligence.

“At the time of Covid, when other countries were putting money into the hands of poor people, this government continued very strict and rule based transfer of money and we have got good dividends from it. So why change colors at this time when you have done it practically till now,” Kumar said.

The government budget size for the current year was Rs 40 lakh crore and next year it is likely to increase by 10 per cent to Rs 43-44 lakh crore.

“Allocation for infrastructure, women-centric schemes is expected to increase in the interim budget for 2024-25,” Kumar said.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)