Revenue receipts beat budget forecast as economy recovers from Covid jolt

The actual improvement came in the current financial year’s collection as the revenue receipts went up from the budget estimate of Rs 17.88 lakh crore to nearly Rs 20.79 lakh crore, as per the revised estimates for the FY 2021-22 given by the finance minister today.

New Delhi:The revenue receipts of the Union government have shown considerable improvement in the current fiscal, giving the confidence to the government that it can spend more on the revenue side and, as such, allot a record Rs 7.5 lakh crore on capital expenditure in the upcoming financial year, showed the latest official data in the Union budget presented by the Finance Minister Nirmala Sitharaman today.

Sitharaman had estimated her revenue receipts for the current fiscal year to be a little over Rs 17.88 lakh crore as the second wave was slowly building up in the country when she presented the current fiscal’s budget in February 2021. She had a reason to be circumspect as her budget estimate for revenue receipts for the FY 2020-21, the first Covid year, nosedived from an estimated Rs 20.21 lakh crore to just Rs 15.55 lakh crore as per the revised estimates, an unprecedented decline of over Rs 4.66 lakh crore or 23 per cent.

It was primarily due to Covid lockdowns in two quarters. The first lockdown completely washed away the first quarter (April-June 2020 period) with little improvement in economic activity in the second (August-September 2020). There was a slight improvement in the actual collection from the revised estimate of Rs 15.55 lakh crore to nearly Rs 16.34 lakh crore as per the actual collection in FY 2020-21.

Second Covid wave fails to dent revenue collection

However, the actual improvement came in the current financial year’s collection as the revenue receipts went up from the budget estimate of Rs 17.88 lakh crore to nearly Rs 20.79 lakh crore, as per the revised estimates for the FY 2021-22 given by the finance minister today. It is an improvement of Rs 2.91 lakh crore or over 16 per cent despite a deadly second Covid wave hitting the country in the April-June period last year when the financial year had just begun.

Economic Survey presented by the finance minister has highlighted the improvement in the revenue receipts as one of the positive aspects for the country’s economy which has been pegged to be the world’s fastest-growing economy for three straight years – 2021, 2022, and 2023 as per the International Monetary Fund (IMF).

Nirmala Sitharaman has estimated revenue receipts to surpass over Rs 22 lakh crore in the next fiscal, an increase of just Rs 1.26 lakh crore or 6 per cent over the revenue receipts of the current fiscal. However, it was enough for the government to allocate a record Rs 7.5 crore for the capital expenditure next year.