Budget 2016: One-time receipts have kept revenue growth steady for years

The government has in the past 10 years managed to keep the momentum of revenue growth steady, thanks to one-time gifts each year, shows a piece of data that Finance Minister Arun Jaitley is unlikely to find from his Budget 2016 officers.

These gifts have hidden the rise in public debt as a percentage of the government’s core revenue. Over the past 10 years, each year, there has been average annual growth of more than 40 per cent in debt measured against tax and what one can call long-term non-tax revenue.

Since there is little scope for fresh gifts in Budget News 2016-17, the minister can face a very difficult fiscal maths this time.

The tendency to use one-off receipts or gifts to cover up low rise in taxes has been a long-standing one with the central government. But it seems to have run its course. So, in 2016-17, unless Jaitley can create something afresh, those gifts will not arrive. At the same time, he faces a much larger demand for higher expenditure.