Gross Excise Duty collections estimated to be lower than BE by Rs 300 bn

Excise duty collection: Gross excise duty collections are estimated to be lower than BE by Rs 300 billion, due to unchanged duties on petroleum products and lower windfall tax realization, as crude oil prices trended below $80/barrel, a report by Emkay added. According to the report, bumper RBI dividends have been a big support for non-tax revenues, divestment proceeds have been meager, at Rs 100 billion (20 per cent of BE of Rs510bn) till Jan-24, collected through minority stake sales, and facing the highest risk of a miss in FY24. 

Divestment

New big-ticket proceeds in the rest of the year are unlikely, as 2-3 of the prospective asset sales face procedural and administrative delays. While several offers-for-sale (OFS) in PSUs are expected to raise ~Rs80-100 billion in Q4, this will still imply a miss of >50 per cent on the divestment target. 

With no clarity on when the IDBI Bank stake sale will take place, the FY25 divestment target is likely to be the lowest in nine years, at Rs 300-350 billion.