The speed with which government's disinvestment programme kicks off as well as interest shown by potential buyers in public sector units being offered for strategic sale will be crucial to prevent a slippage in non-loan capital receipts, according to investment information and rating agency ICRA.
Finance Minister Nirmala Sitharaman on Friday increased the disinvestment target to Rs 1.05 lakh crore for financial year 2019-20, over 16 per cent from the interim Budget target. She said strategic disinvestment of select central public sector enterprises like Air India will continue to remain a priority for the government.
The revised Budget estimates for FY 20 indicate a rise in fiscal deficit at an absolute level to Rs 7 lakh crore from Rs 6.6 lakh crore in FY 2019. However, the government has forecast a mild dip in fiscal deficit target to 3.3 per cent of GDP in FY 20 from 3.4 per cent of GDP in FY 19.
ICRA said the revenue receipts are estimated to grow by 25.6 per cent with a considerable 25.3 per cent rise in net tax revenues and a significant 27.2 per cent expansion in non-tax revenues.
The revised Budget estimate for FY 20 has projected an increase of 27.2 per cent in non-tax revenues to Rs 3.1 lakh crore from Rs 2.5 lakh crore in FY 19. Revenues from communication services are estimated to increase to Rs 50,519 crore in FY 20 from Rs 39,245 crore in the previous fiscal.
Assuming no spectrum auctions, ICRA's estimate for non-tax revenue from telecom receipts in FY 20 is Rs 39,000 crore to 41,000 crore, based on the deferred payments pertaining to earlier auctions and normal fees such as spectrum usage charges and licence fees.
The receipts from dividends and surplus from Reserve Bank of India (RBI), nationalised banks, financial institutions and public sector enterprises are estimated to increase by 37.1 per cent led primarily by higher surplus transfer expected from the RBI, nationalised banks and financial institutions to Rs 1.1 lakh crore in FY 20.
Awaited recommendations of the Jalan Committee, which was appointed to review the economic capital framework for the central bank with respect to the transfer of the RBI's surplus to the government, may crucially influence the government's collections from this source in the ongoing fiscal.
Dividends and profits from other public sector enterprises are estimated to rise by 27.4 per cent to Rs 57,000 crore from Rs 45,000 crore in FY 19. Moreover, the revised Budget estimate for non-loan capital receipts at Rs 1.2 lakh crore is 16.5 per cent higher than the Rs 1 lakh crore included in provisional estimates for FY 19.
The former includes Rs 1.05 lakh crore as receipts from disinvestment of the government's stake in public sector units, 23.5 per cent higher than the Rs 85,050 crore included in FY 19.
"The speed with which the disinvestment programme kicks off, as well as the interest shown by potential buyers in public sector units being offered for strategic disinvestment such as Air India, will be crucial to prevent a slippage relative to this target," said ICRA.
Overall, the realisation of direct taxes and Goods and Services Tax collections, dividends and surplus from the RBI, nationalised banks and financial institutions and public sector enterprises, the revenues raised from telecom sector and disinvestment proceeds will also be crucial to prevent a revenue slippage in FY 20, it said.