Road to Budget: Tax buoyancy may entice Modi govt to splurge
By S Jha
New Delhi, January 29: On Wednesday when Union Finance Minister Nirmala Sitharaman makes her fifth Budget proposals, she will have the comfort that the toiling people of the country provider her with a tax collection turnaround. Direct and indirect tax collections surge may even make the Narendra Modi-led National Democratic Alliance (NDA) government to aim to splurge to nurse political constituency in poll season.
The ever penetrating regime of the Goods and Services Tax (GST), which has brought even items which were not in tax ambits earlier, to make a windfall of collections. The GST monthly collection is now making a benchmark of monthly Rs 1.5 lakh crore. Direct tax collection is equally robust, exceeding even the expectations of the Babus in the North Block.
The pandemic outbreak appears to have brought the turnaround, as 2021-22 proved to be the defining year after the tax collections went beyond the target. This helped the Modi government to pursue with the Pradhan Mantri Garib Kalyan Anna Yojna (PMGKY), merged with the National Food Security Act only recently, which proved to scale up the poll victory of the Bharatiya Janata Party. The government had splurged Rs 390,000 crore on PMGKY after unveiling the free foodgrains for 80 crore people in the country after the outbreak of the Covid-19 pandemic.
The gross tax revenue during 2021-22 was Rs 2710,000 crore against the budgetary estimate of Rs 2220,000 crore, exceeding by a long distance. The finance minister set the target for gross tax revenue of Rs 2760,000 crore for 2022-23. By all accounts the government may see the gross tax revenue in excess of Rs 30 lakh crores, which could be a jump of around 10 per cent. Incidentally, direct tax collections up to January 10, 2023 showed proceeds at Rs. 14.71 lakh crore, higher by 24.58 per cent. The growth rates for Corporate Income Tax (CIT) and Personal Income Tax (PIT) were 19.72 per cent and 30.46 per cent respectively.
The slide of the crude oil from the high of $128 per barrel to $80 per barrel, around which it has been hovering for several months, has also brought the much needed relief to the NDA government. Yet, the Centre is indeed under the fertilizer subsidy stress, which is only growing even while efforts to introduce nano-urea and bio-fertilisers have not yielded desired results.
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