The government's tax revenue growth in the second quarter remains dismal, and this threatens the fiscal glide path that it had set itself. Net tax revenue growth slipped to 3 percent in the second quarter against 6 percent in the first quarter.
This means tax collections have to grow at 42 percent over the rest of the year if the FY20 budget target is to be achieved.
This is a situation in terms of the fiscal numbers despite massive one-time Rs 58,000 crore coming in as additional dividend from the RBI apart from normal Rs 90,000 crore which has already been factored in the budget and plus the Rs 28,000 crore that the RBI had given as interim dividend in February.
The trouble with tax collections started in the last quarter of the last financial year. We have a budget size of Rs 28 lakh crore out of which Rs 16.5 lakh crore is net tax revenues that should be coming to the central government. If that number is going to be shaky, then we are looking at trouble as far as the fiscal numbers are concerned.
The expectation is that in H2, the GDP numbers will be better. However, it is to be seen as to how much do the numbers improve, if they do.