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A Confused Taxation Narrative
The Union Budget 2018–19 was presented against the background of a slippage in the fiscal deficit levels. The government has reiterated its commitment towards fiscal consolidation. In this context, an attempt is made to understand the tax revenue numbers for 2017–18 and 2018–19. The analysis suggests potential shortfall in the revenues budgeted for 2018–19.
The Union Budget 2018–19 has been challenging for the finance minister to balance. On the revenue side, the change in the indirect taxes regime with the introduction of the goods and services tax (GST) just seven months before the presentation of the budget introduced uncertainties in the calculus. On the expenditure side, the fact that this is the last budget this government presents, coupled with the fact that the government has positioned itself as one focused on infrastructure and capacity creation has resulted in announcements which, it is argued, are not adequately funded. This article focuses on the revenue side of the budget to understand what the likely realisations in receipts this year are going to be and how to understand the budget estimates for the next year.
Trends in Revenues
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