{"id":23358,"date":"2021-08-31T14:56:08","date_gmt":"2021-08-31T09:26:08","guid":{"rendered":"https:\/\/plyinsight.com\/?p=23358"},"modified":"2021-09-14T16:29:05","modified_gmt":"2021-09-14T10:59:05","slug":"indian-economy-so-far","status":"publish","type":"post","link":"https:\/\/plyinsight.com\/hi\/indian-economy-so-far\/","title":{"rendered":"Indian Economy So Far"},"content":{"rendered":"
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Nirmala Sitharaman started off on the wrong foot, saddled as she was with the unrealistic Budget numbers presented in the 2019 Interim Budget by her predecessor, and by the fudging of the books that hid the real picture. As a first task, she has done a clean-up act: Expenditure that was off the books has been brought into the Budget, and tax refunds now come with a speed and regularity that would have surprised many taxpayers. Budgeting has become a more honest exercise.<\/p>\n

Ms Sitharaman has also completed the process of de-personalizing tax assessments by making them digital and transparent. Routine tax administration, long a source of harassment and corruption, is thus far smoother than under her illustrious predecessors. Unfortunately, she has had only partial (therefore inadequate) success with the third big tax issue: closing out the enormous number of tax disputes though a settlement exercise.<\/p>\n

The makeover extends to good and services tax (GST), which has so far belied the initial promise held out of raising the tax-GDP ratio over and above providing a boost to GDP itself. By enforcing w-invoicing, linking GST records to Aadhaar, and cross-matching them with income tax filings, she has largely tackled the problems of fake invoicing and tax evasion. This remains a work in progress, though, because GST collections, while in the upswing after four long years, do not yet show a sustained step jump. Although pandemic may be blamed for it. The task will be addressed more fully when the overdue task of rationalizing and reducing the number of applicable rates is taken up, along with reversion to the initially-promised revenue-neutral rate.<\/strong><\/p>\n

Fortune now smiles on the minister. The spurt in tax collections during the April-June quarter, especially in corporation tax, reflects the surge in corporate profitability as large companies have used the pandemic to time costs. Including interest payments.<\/p>\n

That personal income tax collection too have improved through the second wave of the pandemic carries its own lesion, since it testifies that the phased and state-wise lockdowns of the last quarter did not have the same destabilizing impact on economic activity that nationwide lockdown did a year earlier.<\/p>\n

The result of these trends is that the final government accounts for 2020-21 showed better numbers than the revised estimates presented at Budget time. This may repeat itself with revised estimates presented in February. These are positive initial trends when the overall fiscal situation remains under stress\u2014in part because the minister has chosen to not exercise all the taxation option open to her.<\/strong><\/p>\n

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