Yes, we missed Budget Estimates by a huge margin. But how are our estimates, in terms of growth over the previous year, compared to earlier times? Let’s take a look.
What this tells you:
Overall, even with these numbers (way too high in our estimate – gross tax growth will be 10% or whereabouts), there is a problem.
With a much higher allocation to states, the center will have “net” revenue growth (after giving the states their share) of just 1.5%.
On the Expense side, costs are going to be higher due to salary increases (linked to CPI which is 5%) and then, everything else like Defence where the budget is up 10%. Some expenses have been passed on to the state, taking the budgeted allocations to only 90,000 cr. extra which is around 5% higher than last year.
We simply don’t think these numbers are feasible. The government will need to sell a lot more assets or cut expenditure massively to make the deficit numbers work, for we think the revenue from taxes is simply overestimated.
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