New Delhi: The government's earnings math for next fiscal is already beginning to look shaky.
It is expecting Rs 41,000 crore in net additional tax receipts, another Rs 30,000 crore from disinvestment proceeds and Rs 40,000 crore more through the auction of telecom spectrum in 20012-13 (FY13), Finance Secretary RS Gujral said on Monday.
While emphasising the credibility of all these numbers, Gujral admitted that the Rs 40,000 crore expected from the auction of telecom spectrum includes the proceeds of the 2G re-auction following the cancellation of 122 2G licences by the Supreme Court in February. But this process may be over only by early next year . That's cutting it fine.
"We are going by what the Department of Telecom (DoT) told us. They say the auctions will be completed by January or February. Also, DoT already has in its fold spectrum which has been vacated by the ministry of information and broadcasting as well as defence. Normally, 350-380 days are needed to go through the entire process," he said.
Telecom experts doubt if the reallocation of all 122 licenses under the 2G spectrum would be over by then, since DoT has said in the past that about 400 days are needed for the auction process to be completed. Unless the government is eyeing Rs 40,000 crore from auctioning the already available spectrum, this target may well fall short.
It means the 4G auction has to precede the 2G one - but that's like putting the cart before the horse. The prime bone of contention is the 2G spectrum and how it will be auctioned. Without clarity on that, the 4G auction will be like eating the desert before the main course.
Even the disinvestment target looks ambitious. In the current fiscal, only Rs 14,000 crore of disinvestment proceeds have come into the government's coffers against a target of Rs 40,000 crore. Gujral said that even though the government is much better prepared in 2012-13 for achieving its disinvestment targets, it has set itself a much lower target of only Rs 30,000 crore.
A Business Line report on 16 March seemed to agree with his views. "Based on current market valuations, it (the government) could raise about Rs 24,437 crore just by selling five percent stakes in just seven PSUs - SAIL, Oil India, Hindustan Copper, Coal India, MMTC, BHEL and Neyveli Lignite. The proceeds would go up to Rs 48,873 crore on a 10 percent stake sale in each of these companies," this report said.
So according to Gujral's math, over Rs 1,00,000 crore will be received next fiscal from these three measures - net additional tax receipts, disinvestment proceeds and earnings from spectrum auction, or about 1.1 percent of GDP. "Fiscal deficit has been a huge problem in the current fiscal and, therefore, we have made achievement of lower fiscal deficit the first component this time," he said.
Other receipts such as the retrospective tax on deals like Vodafone could become a long-drawn-out legal process. Gurjal said on Sunday that the government is expecting to net Rs 35,000-36,000 crore by taxing Vodafone's acquisition of its Indian telecom assets in 2007.
Even on the oft-repeated stance on the reduction of oil subsidies, the government may not succeed entirely in its objective - it is already facing a political storm over railway fare hikes - and the Finance Minister admitted on Sunday that a decision on oil price increase would have to be an administrative one.
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Updated Date: Dec 20, 2014 07:07:33 IST