Tax revenue, dividend bonanza to help government pay vaccine, foodgrain bill
Even as the economy continues to suffer covid-induced crisis, tax and dividend buoyancy has helped the stressed exchequer to a great extent
Sandwiched between high expenditure and decreased revenues due to the second run of the Covid-19 pandemic, the government has suddenly found two sources of funds that would help the administration meet some of the expense burden better and allow continuation of some of the assistance given to the common man for relief.
Up 100%
One, net direct tax collection grew 100.4% to Rs 1,85,871 crore between April 1 and June 15 compared to Rs 92,762 crore over the same period last year. Though a low base effect of last year provided a boost, this amount can help the government’s expenditure needs.
Two, so far Rs 26,104.37 crore has flowed into the exchequer as dividend for FY21 from 23 listed PSUs, which marks almost 124% increase over the previous fiscal year.
Free vaccination
Some of the extraordinary expenditure the union government has to pick up this year includes the vaccination bill. Prime Minister Narendra Modi had announced that the Centre would foot the bill of vaccination of all citizens above 18 years following which officials estimated that the bill might reach anywhere between Rs 45,000 crore and Rs 50,000 crore.
There are about 94 crore adults in the country. The “free vaccination” programme is set to start from June 21.
More than Rs 35,000 crore
Finance minister Nirmala Sitharaman had allocated Rs 35,000 crore for the vaccination programme in the budget for FY22. The additional amount of Rs 10,000-15,000 crore can easily be met by the surge in revenues.
At another level, state governments will be relieved of concomitant expenditure that would allow them to spend the money on other welfare schemes that they have undertaken to provide relief to the common man.
Free foodgrains
Another big expenditure that the union government has picked up is the delivery of free foodgrains for underprivileged people numbering about 80 crore. Under this programme each individual would get 5 kg of foodgrains per month over and above the quota they get according to the National Food Security Act.
This programme that was supposed to run in May and June has been extended till Diwali. According to government estimates, it might entail an additional expenditure of Rs 1.2-1.3 lakh crore.
A part of this programme can also be financed by the additional revenues and dividends that have flowed in in the two and a half months of the current financial year.
Rural employment generation
The finance minister had allocated Rs 73,000 crore for the MGNREGA scheme in FY22.
Last year, the allocation to this flagship employment generation scheme was raised from a budget estimate of Rs 61,500 crore to Rs 1.11 lakh crore in FY21 to tackle the increased demand after millions of jobs were lost and the employment market ran dry following the nationwide lockdown. If the scheme needs additional funding above the budget estimate this year too, a part of it might be met from the additional revenue flow.