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Credits: AFP

FY23 Budget Estimate May Rise Between Rs 3-3.5 Lakh Cr

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The increase ranging between 10.9 to 12.7 per cent for the budget estimate of Rs 27.6 lakh crore gross tax collection has been recorded for the year. The gross direct tax collections went 30.7 per cent up from the last year to Rs 10.54 lakh crore, as per the latest data, as of 10 November

The government expects a surge in tax revenue at around Rs 3 to 3.5 lakh crore in the current fiscal year considering the revised accounts estimates for financial year 2023 (FY23) which is going to be presented in the February budget, said the officials.

There has been an increase in both direct and indirect taxes’ collection due to improved compliance, the post-pandemic economic recovery and high inflation, officials added.

The increase ranging between 10.9 to 12.7 per cent for the budget estimate of Rs 27.6 lakh crore gross tax collection has been recorded for the year.

Expectedly, the collection will majorly fund the extra spending on food and fertiliser subsidies and keep a check on fiscal deficit.

While presenting the budget in February for the current fiscal year, finance minister Nirmala Sitharaman had set a target of gross tax revenue of Rs 27.6 lakh crore in FY23. Reportedly the estimate is 9.5 per cent up from the revised estimate of Rs 25.2 lakh crore for FY22.

The gross direct tax collections went 30.7 per cent up from the last year to Rs 10.54 lakh crore, as per the latest data, as of 10 November. During the first ten months of the fiscal, the goods and service tax revenue is equally robust and up with 29.7 per cent at Rs 10.5 lakh crore.

A surge in the nominal gross domestic product (GDP) at 26.7 per cent on year-on-year basis was witnessed during the June quarter. It nearly doubled from 13.5% growth in real terms. As compared to the budget estimates in FY22 at Rs 22.2 lakh crore, the gross tax collections too went up, reaching Rs 25.2 lakh crore in the revised estimate.

According to the officials, apart from the recovery, the use of data mining and improved compliance, continued buoyancy. The rise in revenue will enable the government meet a spike in subsidy bills due to the rally in global food, fertiliser and fuel prices.

economy

Indian Economy May Witness Growth At 6-7% In FY23: PHDCCI

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Industry chamber PHDCCI said following the current trend, expectedly the Indian economy may grow at 6-7 per cent in the current fiscal year. The chamber has identified 75 potential products which will help India achieve the trade target of USD 750 billion by 2027

Industry chamber PHDCCI said following the current trend, expectedly the Indian economy may grow at 6-7 per cent in the current fiscal year, on 12 October. Newly appointed president Saket Dalmia said a bounce in the production is noticed and there exist a “big” demand across the nation. 

This statement came a day after the International Monetary Fund (IMF) reduced its economic growth forecast for India to 6.8 per cent in 2022. 

Also, recently the Reserve Bank of India reduced the economic growth projection for FY23 to 7 per cent from 7.2 per cent as estimated earlier. The estimation changed due to extended geopolitical tensions and aggressive monetary policy tightening globally. 

The chamber has identified 75 potential products which will help India achieve the trade target of USD 750 billion by 2027. Exports of the products such as agriculture and chemicals will be promoted across 75 countries like the US and Europe, said Dalmia.

He said that market in countries like the US, Canada, Germany, France, the UK, Japan, the UAE, and China, among others would majorly be focused markets in order to boost exports of such goods. The other category of products includes textiles, auto, and pharmaceutical items. 

“Right now, we have focused on exporting 75 products to 75 potential countries in 75 months which enable India achieve a trade target of USD 750 billion by 2027,” Dalmia informed the media persons. 

The MSME sector has key challenge to meet which is cost of capital and the RBI and the government has been requested by the chamber to look into such issues, said Dalmia.

Biggest challenge is access to capital and the cost which the banks have “not done anything or not enough” at this front, he added. 

The new president informed that

a centre for innovation in green hydrogen will be set up by the chamber, informed the newly appointed president.

“A new initiative to facilitate women start-ups is being planned by us. This is to increase contribution of women-owned business within the economy,” he added.

fiscal deficit

IMF revising India’s growth forecast downwards is ‘gross under estimation’: N K Singh

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He also said there was a need to ensure that those who escaped poverty do not go back into poverty on account of exogenous factors like the pandemic.

N K Singh, Chairman of the 15th Finance Commission, on Tuesday said the IMF’s decision to revise India’s potential growth forecast downwards to 6 percent citing the coronavirus pandemic is a “gross underestimation” and observed that calculations of growth potential are always problematic.

Speaking at a virtual discussion on ‘Financing For Development’ organized by the Institute for Studies in Industrial Development (ISID), he also said there was a need to ensure that those who escaped poverty do not go back into poverty on account of exogenous factors like the pandemic.

“The issue of our medium-term growth potential projected by the IMF last week by recaliberating it from 6.25 percent to 6 percent, in my view, is a gross underestimation. “Calculations of growth potential are always problematic,” he said. Last week, the International Monetary Fund (IMF) revised India’s potential growth forecast downwards to 6 percent citing the pandemic. India’s growth is projected at 9.5 percent in the financial year 2021-22 and 8.5 percent in FY 2022-23, reflecting base effects and strong global growth, he said.

Potential growth is the rate of growth that an economy can sustain over the medium term without generating excess inflation. Singh, who is also the President of the Institute of Economic Growth , said there was a need to raise India’s tax ratio, both from a macroeconomic and redistributive perspective, and also enhance fiscal space for financing public outlays.

Terming the implementation of Goods and Services Tax (GST) as a “path-breaking reform”, Singh said revenue data in the last few months have also suggested encouraging revenue share from the GST. “Nonetheless, there are some serious medium-term challenges as far as GST is concerned,” he said, adding that the issue of revenue neutral rate is a challenging one.Singh also emphasised on the need for broadening the base of both direct and indirect taxes, and reducing exemptions and increasing compliance.

PTI