A couple of days later, it is not clear if finance minister Pranab Mukherjee [ Images ] has budgeted conservatively, or aggressively, or whether a combination of the two cancels out.
For starters, the assumption of nominal (ie real plus inflation) GDP growth of 10.1 per cent for 2009-10 seems on the low side if it is assumed, as Mr Mukherjee said, that the worst of the financial crisis is over.
Against this backdrop, the assumption of poor tax buoyancy in 2009-10 is confusing.
The finance minister expects corporation tax collections to go up by over 15 per cent, but does not expect the same when it comes to personal income tax.
An obvious explanation is the abolition of the surcharge on personal income, which has cost around Rs 10,000 crore (Rs 100 billion). But add this back and personal income tax collections for 2009-10 are projected to be as flat as a chappati, in comparison to the revised estimates for 2008-09.
Why this should be the case when the economy is projected to grow 10.1 per cent, is not clear.
The revenue from excise duties and the service tax are also projected to be flat, but unlike the case of income tax, there is a logical explanation available in these cases since the full year is now going to see lower rates of duty, whereas last year the first three quarters had seen higher rates.
Readers will recall that the rates were cut in December 2008 and February 2009, as a response to the economic crisis.
Indeed, it is worth noting that despite these tax cuts continuing to operate throughout 2009-10, collections are not going to take a hit; the underling trend therefore is of revenue buoyancy, which for some reason has not been assumed in the case of personal income tax.
Meanwhile, it is odd that tax arrears should have risen; they account for around a sixth of the total tax collections in a year. What is distressing is that, of the Rs 103,808 crore of tax arrears as on March 31, 2008, nearly 40 per cent is categorised as 'amounts not under dispute'.
Surely, this suggests a sluggish tax collection machinery; the large amounts under dispute (Rs 64,000 crore or Rs 640 billion, or over 1 per cent of GDP) also suggest that there is plenty of scope for speedy dispute settlement and revenue realisation.
When it comes to non-tax revenue, what is curious is that the government feels it can get Rs 35,000 crore (Rs 350 billion) from the auction of 3G spectrum to telecom companies; industry observers say this is a very optimistic number, which is in any case a big jump from the corresponding figure in the Interim Budget of February, which had placed the figure at no more than Rs 20,000 crore (Rs 200 billion).Contrarily, the Budget estimates also seem to assume no increase in licence fees from the telecom companies, despite some 10 million new subscribers getting added each month.
Perhaps there is a logic to all these numbers, but if so it is known to only those in the finance ministry. To the outside observer, they seem to reflect a quixotic combination of simultaneous caution and optimism.