The Finance Minister, Ms. Nirmala Sitharaman, presented the Union Budget for the financial year 2019-20 in Parliament on July 5, 2019.  In the 2019-20 budget, the government presented the estimates of its expenditure and receipts for the year 2019-20.  The budget also gave an account of how much money the government raised or spent in 2017-18.  In addition, the budget also presented the revised estimates made by the government for the year 2018-19 in comparison to the estimates it had given to Parliament in the previous year’s budget.

What are revised estimates?

Some of the estimates made by the government might change during the course of the year.  For instance, once the year gets underway, some ministries may need more funds than what was actually allocated to them in the budget, or the receipts expected from certain sources might change.  Such deviations from the budget estimates get reflected in the figures released by the government at later stages as part of the subsequent budgets.  Once the year ends, the actual numbers are audited by the Comptroller and Auditor General of India (CAG), post which they are presented to Parliament with the upcoming budget, i.e. two years after the estimates are made.

For instance, estimates for the year 2018-19 were presented as part of the 2018-19 budget in February 2018.  In the 2019-20 interim budget presented in February 2019 (10 months after the financial year 2018-19 got underway), the government revised these estimates based on the actual receipts and expenditure accounted so far during the year and incorporated estimates for the remaining two months.

The actual receipts and expenditure accounts of the central government are maintained by the Controller General of Accounts (CGA), Ministry of Finance on a monthly basis.  In addition to the monthly accounts, the CGA also publishes the provisional unaudited figures for the financial year by the end of the month of May.  Once these provisional figures are audited by the CAG, they are presented as actuals in next year’s budget.  The CGA reported the figures for 2018-19 on May 31, 2019.[1]  The Economic Survey 2018-19 presented on July 4, 2019 uses these figures.[2] 

The budget presented on July 5 replicates the revised estimates reported as part of the interim budget (February 1, 2019).  Thus, it did not take into account the updated figures for the year 2018-19 from the CGA.

Table 1 gives a comparison of the 2018-19 revised estimates presented by the central government in the budget with the provisional unaudited figures maintained by the CGA for the year 2018-19.[3]

Table 1:  Budget at a Glance: Comparison of 2018-19 revised estimates with CGA figures (unaudited) (Rs crore)

	Actuals 2017-18	Budgeted 2018-19	Revised 2018-19	Provisional 2018-19	Difference (RE 2018-19 to Provisional 2018-19)
Revenue Expenditure	18,78,833	21,41,772	21,40,612	20,08,463	-1,32,149
Capital Expenditure	2,63,140	3,00,441	3,16,623	3,02,959	-13,664
Total Expenditure	21,41,973	24,42,213	24,57,235	23,11,422	-1,45,813
Revenue Receipts	14,35,233	17,25,738	17,29,682	15,63,170	-1,66,512
Capital Receipts	1,15,678	92,199	93,155	1,02,885	9,730
of which:
Recoveries of Loans	15,633	12,199	13,155	17,840	4,685
Other receipts (including disinvestments)	1,00,045	80,000	80,000	85,045	5,045
Total Receipts (without borrowings)	15,50,911	18,17,937	18,22,837	16,66,055	-1,56,782
Revenue Deficit	4,43,600	4,16,034	4,10,930	4,45,293	34,363
% of GDP	2.6	2.2	2.2	2.4
Fiscal Deficit	5,91,062	6,24,276	6,34,398	6,45,367	10,969
% of GDP	3.5	3.3	3.4	3.4
Primary Deficit	62,110	48,481	46,828	62,692	15,864
% of GDP	0.4	0.3	0.2	0.3

Sources:  Budget at a Glance, Union Budget 2019-20; Controller General of Accounts, Ministry of Finance; PRS.

The 2018-19 provisional figures for revenue receipts is Rs 15,63,170 crore, which is Rs 1,66,512 crore less than the revised estimates.  This is largely due to Rs 1,67,455 crore shortfall in centre’s net tax revenue between the revised estimates and the provisional estimates (Table 2).

Major taxes which see a shortfall between the gross tax revenue presented in the revised estimates vis-à-vis the provisional figures are income tax (Rs 67,346 crore) and GST (Rs 59,930 crore).  Non-tax revenue and disinvestment receipts as per the provisional figures are higher than the revised estimates.

Table 2:  Break up of central government receipts: Comparison of 2018-19 RE with CGA figures (unaudited) (Rs crore)

	Actuals 2017-18	Budgeted 2018-19	Revised 2018-19	Provisional 2018-19	Difference (RE 2018-19 to Provisional 2018-19)
Gross Tax Revenue	19,19,009	22,71,242	22,48,175	20,80,203	-1,67,972
of which:
Corporation Tax	5,71,202	6,21,000	6,71,000	6,63,572	-7,428
Taxes on Income	4,30,772	5,29,000	5,29,000	4,61,654	-67,346
Goods and Services Tax	4,42,562	7,43,900	6,43,900	5,83,970	-59,930
Customs	1,29,030	1,12,500	1,30,038	1,17,930	-12,108
Union Excise Duties	2,59,431	2,59,600	2,59,612	2,30,998	-28,614
A. Centre's Net Tax Revenue	12,42,488	14,80,649	14,84,406	13,16,951	-1,67,455
B. Non Tax Revenue	1,92,745	2,45,089	2,45,276	2,46,219	943
of which:
Interest Receipts	13,574	15,162	12,047	12,815	768
Dividend and Profits	91,361	1,07,312	1,19,264	1,13,424	-5,840
Other Non-Tax Revenue	87,810	1,22,615	1,13,965	1,19,980	6,015
C. Capital Receipts (without borrowings)	1,15,678	92,199	93,155	1,02,885	9,730
of which:
Disinvestment	1,00,045	80,000	80,000	85,045	5,045
Receipts (without borrowings) (A+B+C)	15,50,911	18,17,937	18,22,837	16,66,055	-1,56,782
Borrowings	5,91,062	6,24,276	6,34,398	6,45,367	10,969
Total Receipts (including borrowings)	21,41,973	24,42,213	24,57,235	23,11,422	-1,45,813

Note:  Centre’s net tax revenue is gross tax revenue less share of states in central taxes.  Figures for GST include receipts from the GST compensation cess.  Note that GST was levied for a nine-month period during the year 2017-18, starting July 2017.

Sources:  Receipts Budget, Union Budget 2019-20; Controller General of Accounts, Ministry of Finance; PRS.

While the provisional figures show a considerable decrease in receipts (Rs 1,56,782 crore) as compared to the revised estimates, fiscal deficit has not shown a comparable increase.  Fiscal deficit is estimated to be Rs 10,969 crore higher than the revised estimates as per the provisional accounts.

On the expenditure side, the total expenditure as per the provisional figures show a decrease of Rs 1,45,813 crore as compared to the revised estimates.  Certain Ministries and expenditure items have seen a decrease in expenditure as compared to the revised estimates made by the government.  As per the provisional accounts, the expenditure of the Ministry of Agriculture and Farmers’ Welfare and the Ministry of Consumer Affairs, Food and Public Distribution are Rs 22,133 crore and Rs 70,712 crore lower than the revised estimates, respectively.  The decrease in the Ministries’ expenditure as a percentage of the revised estimates are 29% and 39%, respectively.  The food subsidy according to CGA was Rs 1,01,904 crore, which was Rs 69,394 crore lower than the revised estimates for the year 2018-19 given in the budget documents.

 

[1] “Accounts of the Union Government of India (Provisional/Unaudited) for the Financial Year 2018-19”, Press Information Bureau, Ministry of Finance, May 31, 2019.

[2] Fiscal Developments, Economic Survey 2018-19, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter/echap02_vol2.pdf.

[3] Controller General of Accounts, Ministry of Finance, March 2018-19, http://www.cga.nic.in/MonthlyReport/Published/3/2018-2019.aspx.