Higher tax collections and reduced devolution of taxes to states pushed the central government’s income up in the month of October 2020. The Centre witnessed its very first enhance in non-debt receipts considering that the lockdown in October, according to the Centre for Monitoring Indian Economy. At Rs 1.4 lakh crore, receipts rose 46.7 per cent on-year. Both tax and non-tax revenues marked more than 50 per cent development in mobilisation throughout the month, CMIE added. After contracting sharply by 24.5 per cent in the very first six months of the present fiscal year, net tax receipts rose 54.1 per cent on-year to Rs 1.2 lakh crore in October.
The revenue tax collections have enhanced considering that the nation stepped into the unlock phase. Income tax collections returned to a development of 2.6 per cent in September 2020 and additional enhanced to 16.6 per cent in October. This also helped to raise the gross tax collections, which grew by 16.9 per cent on-year to Rs 1.5 lakh crore in October 2020.
While the corporation tax when once again witnessed a contraction, its price of contraction narrowed. At 4.9 per cent contraction, it remained at the lowest registered level in the present fiscal. Among indirect taxes, excise duty collections rose to Rs 1.01 lakh crore in October, touching its highest level considering that January 2020. This is a reflection of a gradual improvement in imports from the shock of the lockdown, CMIE underlined.
On the other hand, non-tax revenues also reported a handsome development of 58.4 per cent in October 2020, increasing to Rs 23,930 crore from Rs 15,110 crore in the identical month of the prior year. This has been attributed to a surge in revenue earned from financial services and the dividend received from PSUs. Income from financial services, which mostly comprise leases and license charges, improved from Rs 9,700 crore in October 2019 to Rs 12,240 crore in October 2020.
Meanwhile, “despite the recent pick-up in revenue receipts, achieving the annual target is next to impossible for the government,” CMIE mentioned. The Centre managed to garner only 34 per cent of its targeted income receipts for 2020-21 by October. Usually, by this time of the year, the government attains almost half its income target for the year.