Net tax receipts stood at ₹12.74 lakh crore, compared with ₹ 13.05 lakh crore in the same period last year. By contrast, capital expenditure climbed to ₹6.18 lakh crore, from ₹4.7 lakh crore in the same period.
To be sure, capex contracted 28% in October, compared with the same month last year.
Experts, however, believe that savings from future expenditure and higher-than- budgeted non-tax revenue would help offset slower tax-revenue growth, allowing the Centre to stick to its 4.4% fiscal deficit target for FY26. Last year, the gap was 4.8%.
“Overall, we believe that higher-than-budgeted non-tax revenues would absorb a part of the shortfall on the taxes front,” said Aditi Nayar, chief economist, ICRA.Of the total revenue expenditure, ₹6.73 lakh crore is on account of interest payments and₹2.46 lakh crore is on account of major subsidies. Circumspect tax collection to date is attributed to GST rate rationalisation, which has reduced taxes on 99% of goods and services, and income tax incentives given to the middle class.
Direct tax collections advanced at a muted 4% during April-October, with 6.9% rise in income tax collections and 5.2% growth in corporate tax collections. Indirect tax collections, including GST, climbed 2.6% in the April-October period.
Non-tax revenue climbed ₹4.89 lakh crore against ₹4 lakh crore a year ago.
Officials have reiterated that income tax collections would climb from December. But experts said revenue would have to climb at 22% from November to March for the Centre to meet its budgeted target.
ICRA expects gross tax revenues to undershoot the budgeted target of ₹42.7 lakh crore by ₹1.2-1.5 lakh crore and non-tax revenue to overshoot by ₹50,000 crore on account of the higher-than-budgeted central bank surplus transfer to the centre.