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economy | IST

CNBC-TV18 poll: Fiscal deficit likely to be 0.5% lower than budgeted 6.8%

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The centre's gross tax revenues may be higher by Rs 2.5-2.7 trillion. That is, it may come in at Rs 25 trillion instead of the budgeted Rs 22.17 trillion, according to CNBC-TV18’s poll of 10 leading economists.

The centre's gross tax revenues may be higher by Rs 2.5-2.7 trillion. That is, it may come in at Rs 25 trillion instead of the budgeted Rs 22.17 trillion, according to CNBC-TV18’s poll of 10 leading economists.
After paying the states, the net tax revenue to the centre can also come in at about Rs 7.2 trillion compared to the budgeted Rs 15.45 - that is Rs 1.75 trillion over the budgeted estimates coming in at Rs 17.2 trillion.
This year as well, the Reserve Bank of India (RBI) has paid a dividend of almost Rs 1 lakh crore, the centre's budgeted number was only Rs 53,000 crore. So that's another excess tax.  Excess tax receipts plus the non-tax receipts - so the total could be higher by Rs 2.25 trillion - that's what economists are calculating, but on divestment, the government may fall back.
Instead of the budgeted Rs 1.75 trillion, maybe only Rs 1 trillion is collected. LIC and BPCL could be a bit of a risk, but even if Rs 75,000 crore is deducted, there is still an excess of nearly Rs 1.5 trillion that the government will have.
Now let us take out the expenses, there were higher expenses because of food, fertilizer, etc., that economists say could be between Rs 90,000 and Rs 100,000 crore. So, from the excess even if you take out this excess expenditure, there are still higher receipts of at least Rs 60,000 crore. There are some who say that the excess will be closer to even Rs 1 lakh crore.
So, the government can actually post a lower fiscal deficit by at least half a percentage point. The fiscal deficit could be about 6.4 to 6.5 percent compared to the budgeted 6.8 percent.
This means that government could borrow less and therefore yields can fall and there can be a rally in the bond market also, not just the stock market.
Watch the accompanying video of CNBC-TV18’s Latha Venkatesh for more details.