The Centre’s gross tax revenue for FY24 has been revised upwards to ₹34.4 lakh crore, which is almost ₹1 lakh crore greater than the Budget Estimate (BE) for FY24. Regarding FY25 projections, the government has budgeted 11.7% growth to ₹38.4 lakh crore. The revenue target from taxation is supported by a 16.1% increase in income tax, a 10.5% rise in corporation tax and an 8.7% growth in custom duty. The GST collection target is budgeted to increase by 11% to ₹10.6 lakh crore over FY24 revised estimates.
"Interesting to note that the share of surcharge plus STT as a percentage of total income tax, which was in the range of 3-4% during FY15-19, now rose to in the range of 9-10%. This indicates how the buoyancy in the capital market is resulting in more direct tax revenue to the government," SBI Research says in its Budget 2024 analysis.
The government estimates tax buoyancy at 1.1 for FY25 as nominal GDP growth is projected at 10.5%, while gross tax revenues are projected to grow by 11.7%. For FY24 (RE), the tax buoyancy is estimated at 1.3.
In terms of the central government borrowings, for FY24, these came at ₹15.43 lakh crore, with net borrowing at ₹11.80 lakh crore same as in BE. "The government undertook a switch of ₹1.0 lakh crore. Meanwhile, the buyback has been nil. The government had used only ₹1323 crore as short-term borrowing through treasury bills, which was against the budget of ₹50,000 crore," the report adds.
For FY25, gross market borrowing through dated securities has been budgeted at ₹14.01 lakh crore (slightly lower than the interim budget of ₹14.13 lakh crore). Repayments have also been estimated at ₹2.37 lakh crore (with ₹30,247 crore as buyback). The net market borrowing therefore stands at ₹11.63 lakh crore (~72% of fiscal deficit) against ₹11.75 lakh crore in the interim budget). The Government has also announced a switch of ₹1.50 lakh crore in FY25.
"The government stocks repurchased by means of the switch will not have any impact on the fiscal situation. The short-term borrowing for FY25 has been pegged at ₹(-) 50,000 crore. State gross borrowing for FY25 is expected at ₹10 lakh crore and with repayment of ₹3.2 lakh crore, net borrowing is pegged at ₹6.9 lakh crore. Thus, the net borrowing of the Centre and State combined comes to ₹18.5 lakh crore," the report adds.
In terms of off-balance sheet borrowings, the Budget document shows extra budgetary resources (EBR) for PSUs increased by 20.5% to ₹1.93 lakh crore in FY25 (0.6% of GDP) as compared to ₹1.60 lakh crore in FY24 RE.
"EBR for Coal, Petroleum and Natural gas, Steel and railways has reduced while that of Housing & Urban Affairs and Power has increased. For Housing and Urban Affairs, the EBR has been increased from ₹14,633 crore in FY24 RE to ₹40,000 crore in FY25 (₹13,500 crore in FY25 Interim budget). For FY25 the Government has budgeted ₹45,619 crore (21.4% yoy) in EBR of Power. Total borrowing requirement of the Centre, State and PSUs in FY25 comes to ₹20.4 lakh crore or 6.3% of the GDP."
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