NEW DELHI: The government’s revenue increased by 22.8 per cent to Rs.5.13 lakh crore in the first six months of this financial year compared with Rs.4.17 lakh crore in the same period of the previous 12 months, with non-tax revenue growing by a whopping 51 per cent.
Tax revenue in the six-month period grew by 14 per cent, according to official data on the government’s finances for the quarter ended September 2015, released on Tuesday.
The huge increase in non-tax revenue to Rs 1,43,633 crore from Rs.94,704 crore can mostly be attributed to the ‘Economic Services’ component of the ‘Other Non-Tax Revenue’ segment.
These ‘economic services’ contributed almost 35 per cent of the government’s non-tax revenue in April-September 2015 compared with just 18 per cent in April-September 2014.
“One large component of this economic services segment is revenue earned through the energy sector, due to the auctions taking place there, and another is the revenue the government is earning in stages from the telecom auctions conducted last year,” Madan Sabnavis, Chief Economist, Care Ratings, told The Hindu.
Another area contributing to the increase in non-tax revenue is the dividends and profits accruing to the government, especially what was transferred from the Reserve Bank of India (RBI) to the government, according to Mr. Sabnavis.
Over the last two years, the RBI balance sheets show that it has transferred 99.99 per cent of its profits to the government — this amounted to almost Rs.66,000 crore in 2014-15.
The increase in tax revenue can mostly be explained by the fact that indirect tax collections in the form of customs, excise and service tax have increased significantly due to revenue-generating measures taken by the government over the last year such as increasing the excise duty on petrol, diesel and tobacco, and increasing the service tax rate.
Another likely factor contributing to tax revenue in the first two quarters of the financial year is the advance tax filed by corporates, according to Mr. Sabnavis.
“Tax revenue is up also because advance tax filings by corporates have also gone up. This usually happens in the first two quarters. Companies project their performance over the year and so pay advance tax on that basis. The third quarter should see a correction when these companies have a better idea of their likely performance in the year,” he said.
Net market borrowings
The government data also shows that net market borrowings during the first half of this financial year were at Rs.2.14 lakh crore, which works out to 46.9 per cent of the budgeted amount for the entire year, lower than the 56 per cent of the budgetary expectations achieved by September in the previous period.
