On Friday, the Controller General of Accounts released figures for revenue and spending in 2019-20 that told us that almost every figure in the Union Budget of Feb 1 was wrong by a mile.
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cga.nic.in/NSD/Published/…
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cga.nic.in/NSD/Published/…
Based on this data, there are some eye-opening calculations from @AshokAkaybee in this @bsindia piece. Basically, the tax numbers in the Union Budget presented just a few months ago were off by more than Rs 1.5 lakh crore.
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business-standard.com/article/econom…
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business-standard.com/article/econom…
Note -- this failure to budget properly is not a COVID-19 effect. We're talking about huge errors in revenue projections for *the whole year from April 1, 2019 to March 31, 2020*. The lockdown was announced March 26.
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So @AshokAkaybee points out the Budget said that, in 2019-20, gross tax collections had grown "4% over 2018-19.... [But they] actually contracted by 3.4% ... The only time gross tax collections declined in the last three decades was in 2001-02, when they fell by 0.82%."
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Last year's Budget also got the revenue projections off by a mile. Two years of this is unjustifiable. For one, states have no idea now how much they will be getting as their share. Bond markets may be hit by unexpected borrowing.
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Worst of all, this renders the projections for 2020-21 absurd (to put it mildly). As @AshokAkaybee asks: "Can the government expect corporation tax collections to grow by 22% in 2020-21 in a post-Covid world? Or can there be a 33% jump in income-tax collections?"
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The government needs to stand up and take responsibility for these giant, successive errors and exaggerations. And tell us how it intends to avoid them in 2020-21.
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Note: some very useful context, including a more comprehensive measure of tax revenue, from Arvind S in this thread
