“India on the way to a $5 trillion economy”: FinMin on tax revenues


The focus on capital spending in the recently announced fiscal year budget will boost manufacturing and tax revenues, keeping India on track to a $5 trillion economy, the Treasury said Thursday.

Tax receipts rose a record 34 percent to 27.07 lakhcrore in the past fiscal year, which the ministry says is “notable evidence of the economy’s rapid recovery” from successive waves of COVID-19.



“The central government’s focus on making India a global economic powerhouse and the numerous measures taken to that end have been directly reflected in India’s GDP growth in recent years.

“This has resulted in increased revenue collection for the Treasury and has kept India on track to a $5 trillion economy…” the ministry said in a statement.

In 2019, Prime Minister Narendra Modi envisioned India becoming a $5 trillion economy and a global economic powerhouse. India’s GDP is estimated to be around USD 3 trillion in 2021-22.

The ministry said barring a brief setback due to COVID-19, the government has kept nominal GDP growth above 10 percent in recent years. GST, a simplified method of collecting indirect taxes, was a revolutionary move boosting India’s GDP.

“With a major investment spurt in the Union budget of 2022-23, the coming years will see an increase in domestic manufacturing as well as employment growth. This in turn will directly increase the tax levy to the Treasury,” the ministry said.

Gross corporate taxes in 2021-22 were Rs 8.6 lakh crore compared to Rs 6.5 lakh crore in the previous year.

This, the ministry said, shows that the new simplified tax regime, with low rates and no exceptions, has delivered on its promise by improving business activity for the corporate sector, boosting India’s economy and increasing tax revenues for the government.

In the last financial year, direct tax collection rose a record 49 per cent to Rs 14.10 crore, while indirect taxes grew 20 per cent to Rs 12.90 crore – reflecting the upswing in the economy and the impact of the Anti-tax reflects evasive measures.

For the current fiscal year, capital expenditure (capex) is expected to rise 35.4 per cent to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-hit economy. The capex over the last year has been fixed at Rs 5.5 lakh crore.

(Only the headline and image of this report may have been edited by Business Standard contributors; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has endeavored to provide timely information and commentary on developments that are of interest to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback to improve what we offer has only strengthened our resolve and commitment to these ideals. Even during these trying times resulting from Covid-19, we remain committed to keeping you informed and informed with credible news, authoritative views and incisive commentary on timely and relevant issues.
However, we have a request.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you higher quality content. Our subscription model has had an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve our goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are dedicated to.

Support quality journalism and Subscribe to Business Standard.

digital editor

Leave a Reply

Your email address will not be published.