Ashok Lahiri, chief economic adviser to the finance ministry, on Wednesday said the government's divestment programme will be affected by the Surpreme Court judgment on the Hindustan Petroleum Corporation Ltd case.
Lahiri said the Budget estimate of Rs 13,200 crore (Rs 132 billion) in divestment receipts for 2003-04 was unlikely to be realised.
D Swarup, additional secretary (budget), said the public sector companies would not get any waiver on dividend payments in 2003-04, to ensure that the government could meet the possible shortfall in divestment receipts.
Swarup projected the loss to the government due to the delay in the divestment of HPCL and Bharat Petroleum Corporation Ltd at about Rs 6,000 crore (Rs 60 billion).
He said the balance Rs 7,200 crore (Rs 72 billion) in divestment proceeds for the year should come to the government. The government has so far realised Rs 1,100 crore (Rs 11 billion), mostly through the Maruti Udyog initial public offering.
The additional secretary said the trends in gross tax collection till the end of August showed a 10 per cent rise compared to the 13-14 per cent rise estimated in the Budget for 2003-04.
He said this was not unusual at this time of the year as tax collections tend to spurt in the later half. Tax revenues had also been hit by the truckers' strike in April and the late finalisation of the textile package. Non-tax revenue has grown 11 per cent in the same period.
On a positive note, the fiscal deficit has been reined in at 34 per cent of the Budget estimates, compared to 44 per cent in the same period in 2002-03. He acknowledged that the revenue deficit was higher because of the release of a higher subsidy amount for the petroleum sector in the first few months of the fiscal, compared to 2002-03.