Reflecting an overall decline in economic activity, data from Controller General of Accounts says the net tax collection as of September 30 is lowest in the past five years. The government collected Rs 6.07 lakh crore tax till September, far below its Budget target of Rs 16.49 lakh crore, as per the Controller General of Accounts (CGA) data.

The Centre had collected 39.4 per cent (Rs 5.8 lakh crore) of the total target of Rs 14.8 lakh crore in 2018-19; 44.2 per cent (Rs 5.4 lakh crore) of total target of Rs 12.2 lakh crore in 2017-2018; 42.5 per cent (Rs 4.4 lakh crore) of total target of Rs 10.5 lakh crore in 2016-2017; and 40.2 per cent (Rs 3.2 lakh crore) of total target of Rs 8.7 lakh crore.

The net collection of both direct and indirect taxes have seen a significant decline. The government has collected total corporate tax of Rs 2.49 lakh crore this year so far, which is less than one-third of its full-year target of Rs 7.66 lakh crore. Finance Minister Nirmala Sitharaman's announcement of over 7 per cent reduction in corporate tax to 25 per cent would lead to further fall in tax revenue collection.

Personal tax collection till September 30 is over one third (Rs 2.13 lakh crore) of the total target of Rs 5.69 lakh crore for the fiscal year. The CGST (central goods and services tax) so far seems to be in sync -- at Rs 2.47 lakh crore -- with the government's full-year estimate of Rs 5.26 lakh crore.

The lower tax collection means the government may fail to meet its fiscal deficit target of 3.3 per cent of the GDP.  India's deficit for the April-September quarter stood at 95.3 per cent of the 2018-19 budget estimate (BE) in the same period last year. In absolute terms, the fiscal deficit, which is the gap between expenditure and revenue, stood at Rs 6,51,554 crore as on September 30, 2019. The government had kept the fiscal deficit target for the current financial year at Rs 7.03 lakh crore, which is equivalent to 3.3 per cent of the gross domestic product (GDP).

All these numbers indicate a persistent slowdown in the economy. In the first quarter of FY20, GDP growth slumped to a six-year low of 5 per cent. Private consumption decelerated to an 18-quarter low of 3.1 per cent in the June quarter.