Decoding the fineprint of the Union Budget 2020 that was presented by the finance minister Nirmala Sitharaman, Subhash Chandra Garg Former Finance Secretary said the tax assumptions made were of about Rs 1.45 lakh crore less than the BE numbers but believe they are a little on the higher side.
"My estimates suggest that there would be a shortfall of about Rs 2.5 lakh crore. But I hope with better compliance or not allowing input credit or something else, if they can get to that number of Rs 1.45 lakh crore, it would be better," he said, adding that next year's growth rate seems to be very reasonable.
When asked about the divestment number, he said, "Disinvestment receipts apparently look very high. The numbers suggests that Rs 1.20 lakh crore is estimated to come from the non-financial entities. Additionally, Rs 90,000 crore has been taken as credit from the financial entities but we have not done much of the disinvestment on the financial side - the only two candidates are LIC and IDBI Bank, he said in an interview with CNBC-TV18.
According to him, LIC IPO would require a lot of effort but most of the Rs 90,000 crore would likely come from the IPO than IDBI stake sale.
When asked about measures announced with regards to bond markets, he said, one good measure was corporate bond limit is being raised from 9 percent to 15 percent, which is a substantial move up but there was no announcement on government bond limit being raised and if they are not raised then inclusion in indices will not materialise. So, I am not very optimistic about being in global bond indices next year but move on corporate bond is good, he added.