Excerpt From: FINANCIAL EXPRESS
Did you know that India has 7 taxpayers for every 100 voters? Or, the fact
that rating agencies have upgraded China, while India’s credit rating has been
unchanged – something that the Survey challenges. We take a look at 8
interesting facts about India, as highlighted by the Economic Survey 2017:
1) Indians on The Move
New estimates based on railway passenger traffic data reveal annual
work-related migration of about 9 million people, almost double what the 2011
Census suggests.
2) Biases in Perception
China’s credit rating was upgraded from AA- to A+ in December 2010 while
India’s has remained unchanged at BBB-. From 2009 to 2015, China’s
credit-to-GDP soared from about 142 percent to 205 percent and its growth
decelerated. The contrast with India’s indicators is striking.
3) New Evidence on Weak Targeting of Social Programs
Welfare spending in India suffers from misallocation: as the pair of charts
show, the districts with the most poor (in red on the left) are the ones that
suffer from the greatest shortfall of funds (in red on the right) in social
programs. The districts accounting for the poorest 40% receive 29% of the total
funding
4) Political Democracy but Fiscal Democracy?
India has 7 taxpayers for every 100 voters ranking us 13th amongst 18 of our
democratic G-20 peers.
5) India’s Distinctive Demographic Dividend
India’s share of working age to non-working age population will peak later
and at a lower level than that for other countries but last longer. The peak of
the growth boost due to the demographic dividend is fast approaching, with
peninsular states peaking soon and the hinterland states peaking much later
6) India Trades More Than China and a Lot Within Itself
As of 2011, India’s openness – measured as the ratio of trade in goods and
services to GDP has far overtaken China’s, a country famed for using trade as
an engine of growth. India’s internal trade to GDP is also comparable to that
of other large countries and very different from the caricature of a
barrier-riddled economy.
7) Divergence within India, Big Time
Spatial dispersion in income is still rising in India in the last decade
(2004-14), unlike the rest of the world and even China. That is, despite more
porous borders within India than between countries internationally, the forces
of “convergence” have been elusive.
8) Property Tax Potential Unexploited
Evidence from satellite data indicates that Bengaluru and Jaipur collect
only between 5% to 20% of their potential property taxes.
The analysis carried out for the Survey has found that greater service
delivery is correlated with more resources, own revenue, staffing and capital
spending per capita. Currently, tax revenues are not constrained by inadequate
taxation powers of ULBs (Urban Local Bodies). One promising source is property
tax.
57 comments:
The fact that there only 7 taxpayers for every 100 voters does not come to me as a surprise. With pace that the world's materialism is growing it is quite predictable that the human greed for comfort and luxury would increase. Back in the 80s and 90s, when the people were not aware about the lifestyles of the people of other countries due to lack of social media, they required less to live on. But with the introduction of social media and smart phones, people have become aware and influenced by the lifestyles of the people in developed countries. And it is only natural for them to want and desire more. And to achieve that they try to avoid tax as much as they an and keep more for themselves.
Paridhi Galundia (17bal035)
India is a very diverse and fast growing economy with lots of possibilities and opportunities. The requirement is to analyse and mould them according to the need of hour. The survey has highlighted many things about the growing economy of ours and also the loopholes which are required to be analysed. This clearly shows that how the trade of India is increasing within itself and also internationally as it also exceeds China. The increase in number of work related migration highlights the most important trade factor that is within the states. Indian diversity is helping our economy in a very efficient way to grow.
The survey also suggest many areas where we need to be more focussed and improve them. This shows a very detrimental fact that we have only 7 taxpayers among 100 voters,which is very tragic situation. The government also fails in some areas as we can see that poorest 40% are getting only 29% of total funding,welfare spending is suffering from misallocation which is something that needs to be get rid of. The irony is we all want Indian Economy to grow at a faster pace but when it comes to cooperate we fails,we only want to blame others. The thing is first we have to change ourselves and then only something can happen. It is clearly seen that in the coming near future Indian working age will be growing to larger extent which will boost the Indian economy and also have a lot of possibilities but need is we have to be cooperative.
The other thing is that the rating agencies are also biased that they upgraded China's ratings and not India's despite of the fact that India is growing much faster than China. This shows their mindset that how they are not feeling safe from our growing economy.
There is a dire need to analyse that if our economy can grow that much with so less cooperation of citizens how far it can go when each and every person will cooperate.
Vineet Tayal
17BAL058
7 taxpayers out of every 100 voters is a matter of embarrassment for a country constantly declaring its economy to be developing. As with the demonetization drive,it was also revealed that only 25 lakh people declare themselves to be above the 5lakh cap for income tax,and that in itself is a very big lie. Whether the mismanagement is to be blamed or the high scale of corruption,we don't know,but at the end of the day,it is the common man who suffers the most. Misallocation of funds is the next biggest problem as the Consolidated fund of india often goes into less required fields and the more needy people are left feeling dejected and cheated on.If the government appropriately used the Fund,for welfare schemes and without corruption,that in itself is a very big incentive for more taxpayers to declare their actual income and pay more tax,when they see their money being put to good use.
17bal069
India is a country which is economically sound and provides ample of opportunities for start ups,and to some extent is able to attract foreign companies(MNC)to uplift it's status.
But when it comes to participate in the most vital contribution that is of giving Tax for the development of the country,Some people fail to recognise it's importance in framing of fiscal policy and production because these policies have a deep impact in making a country financially able to upgrade it's citizen's standard of living,purchasing power and their social satisfaction,as when the citizens give tax it provides govt. with the platform for implementing programmes,projects and other welfare techniques to encourage good for masses.
One of the most important problem that India fails to understand is right allocation of resources i.e resources which are meant for producing a particular good is wrongly allocated from it and put in production of different good which is either less productive or does not benefit the society.
Also, we need to be able to decide what we have to produce in what quantity and for whom,So that there is continuous growth of country's GDP and satisfaction of mass.
Moreover, I would like to conclude my views by saying that India's potential is something which cannot be judged because it is beyond our reach but the only thing we need to focus on is how to identify it and use it as a tool for achieving great heights in terms of GDP,economy and welfare.
ADHIRAJ SINGH
17BAL005
As talked of the demographic dividend of population of India, i can say that India has a higher working population than other nations. The working age group bracket of 18-60 is where most of the population of India lies. This is the reason why India is known as a "young nation". All other countries are slowly left with less and less number of working population which is affecting their growth. As we can see in the case of China, due to its one child policy, the working population had started to decline and they were falling short on the labour. So, they striked off the policy. India is at a better standing in this situation right now. But the educated unemployed youth are becoming the roadblock in the path of development of India
Sanjhi Agarwal
17bbl043
The economic survey 2016-17 has advocated for higher property tax. THE study above also shows that cities like banglore and jaipur collect only 5-20% of their potential property tax.property tax potential is large and can be tapped to generate additional revenue and for better governence. easier movement of people and goods within cities,functioning sanitation and sewage system are essential for economic machine to function but face the problem of lack of fund. thus a potential increase in property tax can help.without support from property taxes there can be no progress on urban infrastructure.it is well known that service delivery is correlated with more resources and capital spending on per person.
AYUSH CHAURASIA
17BAL014
Work related migration has increased, people couldnt find employment in their places. In most of the cases it could be from rural to urban. Need of proper infrastructure for employment is urgently needed to stop high scale migration or else population in any particular city will increase to its fullest of capacity to sustain. Also the local people will suffer as the competetion will increase for one particular job. If their are more people and less job then salary to be given will also reduce. Promotion of cottage industry could lessen this situation.
Taxpayers in India are only 4% of total population, there is so much burden on the limited taxpayers. many people thus try to evade tax. The tax should not be unreasonably high, some other sources should be opted by the govt. for the revenue like properly monitering the tax from shops and other taxes like property tax etc.
Abhilekh Tiwari
17bal066
The fact that 9 million people migrated to other city is so embracing for india , as it is huge no. Of people that are migrated and there is only one reason of migration i.e. to seek emplyment. As we see in many parts of our country there is no employment people need to shift or migrate from there native place beacause of unemployment, and if people migrate constantly there will be huge population in one city which will increase competition and again the cause of unemloyment will arise so they should be peovided employmwnt in there places so that they can earn and live at their own place...
Since long we are watching that nobody is ready to pay tax, those earns more they do not want to pay tax and some earns for daily food they do not have enough to pay tax. the cause that there are 7 taxpayers in 100 this shows that there is huge corruption that people just want to earn lakhs and crores but they do not will to pay tax and some people are so poor they do not even can provide daily livelihood to their family.
Govt ahould adopt some measures to collect tax from them who are need to pay tax.
Mayank sahu
17bal029
Budget must study the present in the light of past for the purpose of the future.
There have been many economic changes this year internationally and domestically affecting Indian economy:-
1)INTERNATIONALLY- BREXIT & TRUMP's NEW ECONOMIC POLICIES (like VISA)
2)DOMESTICALLY:- GST & DEMONETISATION
* it was for the first time that railway ministry shared its data regarding passenger which shows that 9 million people migrate within India for job search almost double of 2011 because people are not getting what they should there are inequalities in income.
* targeting of social programs should be reformed as the data shows that district with poorest 40% receives only 20% of funding.
* we have political democracy where everybody votes but what about fiscal democracy only 7 people of every 100 taxpayers are paying taxes this shows that we need complete tax reformation and there should be proper scruitnising .
* there is also one more major problem that inspite of internal borders being so much porus where people can easily migrate for jobs there is spatial dispersion in income.
* property taxes also contribute much to the economy but satellite data shows that in cities like Jaipur and Bengaluru pay only 5%-20% of propert taxes.
SOMESHWAR SINGH CHANDEL
17BAL112
India has faced the problem of migration to other countries for a long time. We thus coined the term "brain drain" and have undertaken various policies to stop this process where the intellectuals leave the country for better job opportunities. Policies like Make In India, to increase job opportunities, subsidised higher education, incentives for NRIs to return all seem futile. The many reasons for this trend like standard of living, opportunities in terms of research, startups and other self actualisation needs which people look at and do not find in India and thus migrate.Remedial methods should be taken not just in monetary terms but also psychologically o prevent further drain of brain as migration not only lowers workforce but also hinders the growth of the economy due to insufficient knowledge and thinkers.
The gradings represent the loan repaying capacity of the country. India is a developing nation and is trapped in the vicious debt cycle which compels the country to take loans to repay existing loans and also leads to fiscal deficit which India has been trying to address in every budget passed by it for years now. Increase in GDP can be on account of multiple factors like increase in production, increase in income of certain rich sections of the society which in no way formulates in the increased capacity of a country to repay loans. There needs to be a better management of the funds which not only results in an increased GDP but also in higher international ratings.
The misallocation of resources is not a problem for India only, but for the world at large. As it is said 1% of the world population uses 70% of the world resourses. Secondly the gulf of the rich and poor in India, widens and deepens continuously. The rich continue to get privileges for their position while the poor continue to be exploited, which comes as no surprise The basic policies need to be changed and major issues that lead to a situation like this, like corruption need to be addressed as soon as possible strictly.
As for the taxpayers and the taxes. Major revenue of the country is not from direct taxes but indirect taxes which are regressive in nature. indirect taxes are charged on the use of products and the products can be used by lower income groups as well as high income groups uniformly, which is unfair and questions the policies. Our tax policies have various loopholes and people use these to to escape paying taxes.Our laws need to be implemented more strictly and be more solid but not rigid. Rigidity stops growth and in turn can put a bad face forward for the rest of the world, like in the Vodafone case. Laws are meant to protect the rights of the citizens and not to harass them. This needs to be kept in mind, by the policy makers while formulating policies. I say so because all this observations and problems boil down to wrong policies and their implementation.
Varada Jahagirdar
17bbl060
"7 taxpayers out of 100 voters" most terrible and embracing situation that India can have. But somewhere government is also liable for this situation as govt has to take some strict measure regarding taxes and regardless of these facts India is still known as developing economy. From all these figures we can conclude that we are largely a tax non-compliant society.
-Work related migration is increasing day by day is because of the lack of opportunities available in a particular area and these lack of opportunities is because of the flaw in government schemes to provide employment. These migration can be from 1 state to another but majorly it is from rural to urban. -Misallocation of funds is the next biggest problem as the Consolidated fund of india often goes into less required fields and the more needy people are left feeling dejected as from the survey it is clear that the districts with the most poor are the ones that suffer from the greatest shortfall of funds in social programs. The districts accounting for the poorest 40% receive 29% of the total funding. -Property tax is the primary source for urban cities like Jaipur and bengaluru. But the Survey has cited poor assessment rate, weak collection efficiency, flawed methods for property valuation, loss on account of exemptions, and slack enforcement as the main factors behind poor realisation of the property tax.
Shubham raghuwanshi
17bal050
In a country like India, where there is so much of decentralization of authority and so less of centralization of power,(and the literacy rate still in its 70's),to expect that things are going to run smoothly feels more like a mockery.
Our system is smart and funny at the same time. To make somebody accountable for something is a hercules task.
We say that 'we the people of India' are the most powerful and we derive our power from the Constitution of India but the Constitution of India is framed by the elected representatives(who for that matter put forward only the will of the masses) who ultimately elect the Prime Minister of India. The Prime Minister of India brings forth the tax policies (or any policy for that matter), but in the whole process where are 'the people of India' even considered? Or do we say that when we elect a representative we agree with whatever policy he brings before us?
I think, the literacy rate that I mentioned in the 1st paragraph was useless and I also think that educating people and increasing the literacy rate is futile because at the end of the day we are not willing to pay tax to the government. We need to know where the tax that we give is being utilised (stressing the word 'utilised'). Things should stop moving in a circular motion and there must come an end point where we can make atleast somebody accountable for our money.Maybe then we can increase the willingness of 'the people' to pay taxes.
Apeksha Joshi
17BAL076
Palak Jain
It is believed, as I had read somewhere, by 2020 India's 64% population would be part of its workforce. Isn't that HUGE? Such portion of a country's population part of workforce! How great would be the income! How sky-reaching would be the economy!
Unfortunately, that isn't the reality. The reality is what this article shows.
While I was 6 or may be 7 years old, between 2006-2008 I used to hear (although not understand) "India will be a superpower by 2020" Somehow they seemed to quietly manipulated the sentence now in 2017 as "India may become a superpower in 21st century."
How ironic and funny this seems to me.
A country still with a literacy rate of 74.04% (By the way, you are literate if you can write your own name) A country still 'just managing' to fight malnutrition, poverty etc, is it really that we would in any way able to compare our very neighbor who was almost at our level few years back.
It seems similar to two class mates in a class. Both scoring very poor in an exam and then, one through better studying became a better student. No wonder they have rivalry! :p
However, that's not the point.
The point is-What is the reason?
Is it a political system where everytime the parliament wishes to take concrete steps, somebody breaks a chair or two of the house? Inefficient Political System that is to say.
Or is the reason, our system of governance-Democracy? China being a communist state at times is able to impose its views on the public-the way a father orders his child as he is not mature enough to understand the importance of certain things? Does China's government lead to more efficiency and order? And democracy is leading to more confusion and chaos?
I at times feel India is more of confused economy rather than Mixed economy.
Not saying India must turn into Dictatorial or communist state.
The point of discussion is, that the system should be working fast, in a disciplined manner and with each other's cooperation.
THAT wouldn't come by dictatorship, but by the tax payer, citizen, politician and every single person understanding his role towards the country.
Coming to the porperty tax,
Most people buy properties when it comes to investment. Now since this is an investment and not a need we may call it luxury good.
Now luxury good as we are discussing in class is highly inelastic. Even if tax increases, the buyers would not care about it and still purchase it.
Now there are 2 possibilities :
1. The buyer shares the burden of tax and switches to some other investment such as shares, gold jewelry etc. And thus, the sale of property fall exponentially.
2. The burden falls on real estate sellers.
Therefore both cases would not serve the purpose and may prove to be disastrous.
I may not be too knowledgeable about subject. I answered the Property tax point as per my understanding.
Therefore, the decision must be thought over carefully and system of decision making must be more transparent and hassle-free.
Palak Jain
17BAL034
The above study has presented various problems that Indian economy still faces. Though Indian economy is growing economy but still it has many loopholes which is preventing it from coming up in the race of developed economy. As the study shows there are only 7 taxpayers over 100 voters, this shows that citizens irrespective of their income are unwilling to pay taxes. This leads to another argument that somewhere
government is also liable for this situation. When the government is unable to use its revenue for productive means which people expect after paying taxes people will consequently chose to do tax evasion for welfare of their own. Also, when the welfare of consumers will move towards government why people will obey the tax policy.
India has huge working population as compared to other countries but government fails to generate employment opportunities to suffice the need of young employable population and this leads to other problems like poverty and migration of young population towards other countries.Also the problem of educated unemployed youth has becoming huge backdrop in development of Indian economy.
Priyanka Bajpai
17bal098
On the third fact in above article, the social programme done in villages has a hidden motto of gaining votes. Government only allocate their funds where they feel that from that segment of population votes can be extracted. Government also recently have shifted their funds from social programs and pumped it into infrastructure. Government's argument in doing so is that in order to abolish poverty from poor areas, states need infrastructure which will result into more collection of tax revenue. This argument might seem right in long run, but the short term needs are not taken into consideration. Due to this idea it may happen that government will not be able to put their focus in urgent and short term matters,like 1.malnutrition 2 providing clean water to villages 3.education in villages. Therefore it must be understood that before we jump into the realm of ECONOMIC DEVELOPMENT of country, we need to first Give them SOCIAL ECONOMIC DEVELOPMENT.
MANYA ANJARIA
17BAL088
Its very shameful for India that out of 100 people only 7 pay tax. If we talk about japan, then the personal income tax rate in japan stands at 55.95%, irrespective of that 90% of the working class pay tax. This clearly shows the mentality and determination of the people for their society and development. And in India the people(who believed them to be educated)seek ways to avoid taxes. They blame the government for their condition.
Is the government responsible? Really !!!!!!!
True that there are some loopholes like the government is unable to provide employment opportunities and proper fund for the welfare of rural India as indicated in the allocations of welfare funds and traffic data of annual work related migration, but how we are going to develop without proper funds that are generated from the taxes. we have to change our way of thinking and have to work with the government for changing the present condition.
DENISH PATEL
17BAL019
The impediment to the rating agencies upgrading India’s sovereign ratings lies in their methodologies. The sovereign rating methodology factors economic strength, institutional strength, fiscal performance, and susceptibility to event risk to assign ratings. Rating agencies are fixated with per capita income. The emphasis on per capita income is because countries with higher per capita incomes are better equipped to withstand cyclical volatility and are endowed with higher debt servicing ability. India’s low per capita income has resulted in its sovereign rating being lower than countries with higher deficits and indebtedness and lower growth prospects.
But does India’s low per capita income contribute to socio-economic and political instability? The answer is clearly, no. The Gini index/co-efficient, a number ranging from 0 to 100, measures a country’s income distribution. Zero represents perfect equality and 100, perfect inequality. India’s Gini co-efficient at 33.6 compares favourably with those of China (46.9), Spain (35.9), and Indonesia (36.8). Italy’s Gini co-efficient is better than India’s at 31.9.
The Government’s reform initiatives including FDI liberalisation, bankruptcy code, monetary policy framework agreement, GST and the Aadhaar Bill are expected to spur investments, eliminate tax inefficiencies and improve government revenues and governance.
The ratios of China’s non-financial sector debt and household debt to GDP are among the highest in the world. The agencies narrowly focusing on government debt and ignoring the systemic risks stemming from high levels of non-financial sector and household debt is baffling.
Whether China’s sovereign credit rating is representative of its macroeconomic profile and debt servicing ability is a question rating agencies ought to address expeditiously. It is high time rating agencies rid their portfolios of such inconsistencies to enable investors assess and price sovereign risks accurately.
The International Monetary Fund’s Article IV consultation report dated August 2016 estimates China’s 2016 “augmented fiscal balance” as a percentage of GDP, to be 10.1 per cent. China includes net land sales proceeds as a government revenue, whereas IMF treats net land sales proceeds as a financing cash inflow. IMF’s Article IV India consultation report dated February 2017 estimates India’s 2016-17 general government balance as a percentage of GDP at -6.7 per cent; which is equal to India’s official estimates. If this higher deficit is juxtaposed with China’s non-financial sector and household debt, what would its “true” rating be?
In conclusion, a ‘BBB-’ sovereign credit rating for India does seem low in the context of its significance to the global economy, strong macroeconomic performance, improving governance and regulation, and robust growth prospects. A five to six notch differential between India’s and China’s sovereign ratings is excessive.
India is considered as one of the most promising nations looking into her journey so far.But it still has many problems to tackle of which the main ones being listed out in the above summary of the report.One of the problem being talked about is the inefficient collection of property tax from the potential regions like Bengaluru and Jaipur.It is to be known that Jaipur which has the potential range between Rs.380-Rs790cr has managed to collect only Rs.41 cr which is gravely due to the weak collection efficiency,poor assessment rate,flawed methods of property valuation,loss on accounts of accounts of exemptions and poor enforcement.It is also seen that only few people pay income taxes and the property taxes are too low.To tackle this problem 'The OECD Economic Survey' gives efficient and reliable constructive method which being as follows-for further development and social needs, revenue from property and personal taxes are to be raised which can be done majorly by removing the tax expenditure that benefit the rich the most and freeze the income thresholds from which rates apply.The one method which attracted my attention the most was the implementation of higher real estate taxes by the municipalities but we again come to square one which being that implementation of policies cannot in itself solve the problem but it has to have a proper administrative system for its just and efficient implementation which enables us to understand that before introducing new policies in the system it has to be looked after that present policies are being implemented properly or not and what are the reviews of the general public about the same which i believe truly will enable government to come up with more effective and sustainable policies for the well being of the country as a whole.
Arya Vineeth
17bbl006
It is no wonder that biasness in perception exists in India. The article shows that there is misallocation in welfare spending which lowers the faith of people in administrative working and tarnishes the image of India as a welfare country. It is obvious that there is more work related travel. Economy is rising and people no more stay in one place for a job. Jobs now involve a lot of travel. Also there is increased awareness and people migrate from rural areas in search of jobs to urban areas. Iis interesting to note that India traes more than China,a country famed for using trade as an engine of growth but is still far behind as far as GDP and other economic factors are concerned. This shows that trade cannot alone used as a criteria for development. The reason for this lagedness could also be the fact that India trades mostly within itself and hence, doesn't earn as much foreign exchange as it should
Vanshika agarwal
17val117
AMAN DEGRA said...
Sir AMAN DEGRA (17BAL008) this side from adhiraj singh's account.I m unable to access my account thats why i m commenting from this account
>INCREASE IN MIGRATION of people in search of employment can help to increase the GDP of our country because it will help to reduce the LOCATION BASED UNEMPLOYMENT i.e. for example rajasthan lacks in industries Thats why their is lack of employment in state .If people migrate from RAJSTHAN to some other industrial states like MAHARASTRA,GUJARAT,UTTAR PRADESH then it will help to reduce the unemployment and will contribute to GDP
>Also it will benefit the producers also. As people will migrate their will be a good supply of workers and this will provide cheap working class to producers
NAME>Aman Degra
Roll no.>17BAL008
According to me this Economic Survey has categorically slammed rating agencies – Standard & Poor’s – for not changing India’s credit rating, while upgrading that of China. In the case of India, Standard & Poor’s in November 2016 ruled out the scope for a ratings upgrade for some considerable period, mainly on the grounds of its low per capita GDP and relatively high fiscal deficit. The actual methodology to arrive at this rating was clearly more complex.
Lower middle income countries experienced an average growth of 2.45% of GDP per capita (constant 2010 dollars) between 1970 and 2015. At this rate, the poorest of the lower middle income countries would take about 57 years to reach upper middle income status! Now if I contrast this to China's GDP rise its like , in 2009, China launched a historic credit expansion, which has so far seen the credit-GDP ratio rise by an unprecedented about 63 percentage points of GDP, much larger than the stock of India’s credit-GDP. At the same time, Chinese growth has slowed from over 10% to 6.5%, the survey points out.
At last I must agree with one of the economist's thinking that these contrasting experiences raise a question: can they really be explained by an economically sound methodology?....
Jaskaran Saluja
17bbl015
No doubt the statistic that the country’s tax-to-GDP ratio is low compared with the rest of the world, is well known. Now, we know why taxpayer concerns are still not such a major agenda with our parliamentarians, given that 93% of their constituency of voters do not constitute taxpayers.
And possibly why we witness lack of taxpayer services. Equally interesting in the findings of the Survey are three other facts on taxation.
Well-Oiled Excise Duty
Firstly, the Survey states that the most notable feature on revenue collection has been the over-performance (even relative to Budget estimates) of excise duties based on buoyant petroleum consumption. More broadly, tax collections from petroleum sector have held up to a greater extent than expected possibly due to payment of dues being in demonetised notes.
Most analysts expected that the Income Disclosure Scheme would help meet the tax targets. However, the indication from the Survey shows that the increasing levy on low oil prices has bailed out the exchequer.
This was an outcome of a conscious policy decision. When oil prices started declining, India increased the excise duty on branded petrol and diesel — the increase in petrol tax has been over 150% in India. In contrast, governments of most advanced countries have simply passed on the benefits to consumers, such as UK having reduced taxes by 28.8%.
Therefore, neither the expanded tax rules for corporate India nor the amendments in service tax have contributed as materially as the simple levy of excise duties on petroleum products.
This brings us to the next interesting observation: the government’s decision to impose taxes on petroleum products leads India to an implied carbon tax; India moved from a regime of carbon subsidy to one that imposed carbon tax on petroleum products at about $150 per tonne, which is six times greater than the internationally recommended standard. India is one of the few countries to also impose a tax on coal, which doubled in 2016-17 to Rs 400 per tonne.
Tax policy in India is certainly contributing materially to green action as reflected in the various projects and programmes now funded via the dedicated cesses or via the central allocations.
The third interesting dimension is that tax on black money is cited as the first and foremost benefit from the recent demonetisation. The Survey holds that income-tax collections have risen due to increased disclosure.
Added to this, payments to local bodies and discoms also rose as demonetised notes remained legal tender for tax payments/clearance of arrears, including local taxes.
The Survey has also captured an eye-popping statistic on property tax. It says that evidence from satellite data shows that Bengaluru and Jaipur collect only 5-20% of their potential property taxes. Arihant jain (17Bal011)
No doubt the statistic that the country’s tax-to-GDP ratio is low compared with the rest of the world, is well known. Now, we know why taxpayer concerns are still not such a major agenda with our parliamentarians, given that 93% of their constituency of voters do not constitute taxpayers.
And possibly why we witness lack of taxpayer services. Equally interesting in the findings of the Survey are three other facts on taxation.
Well-Oiled Excise Duty
Firstly, the Survey states that the most notable feature on revenue collection has been the over-performance (even relative to Budget estimates) of excise duties based on buoyant petroleum consumption. More broadly, tax collections from petroleum sector have held up to a greater extent than expected possibly due to payment of dues being in demonetised notes.
Most analysts expected that the Income Disclosure Scheme would help meet the tax targets. However, the indication from the Survey shows that the increasing levy on low oil prices has bailed out the exchequer.
This was an outcome of a conscious policy decision. When oil prices started declining, India increased the excise duty on branded petrol and diesel — the increase in petrol tax has been over 150% in India. In contrast, governments of most advanced countries have simply passed on the benefits to consumers, such as UK having reduced taxes by 28.8%.
Therefore, neither the expanded tax rules for corporate India nor the amendments in service tax have contributed as materially as the simple levy of excise duties on petroleum products.
This brings us to the next interesting observation: the government’s decision to impose taxes on petroleum products leads India to an implied carbon tax; India moved from a regime of carbon subsidy to one that imposed carbon tax on petroleum products at about $150 per tonne, which is six times greater than the internationally recommended standard. India is one of the few countries to also impose a tax on coal, which doubled in 2016-17 to Rs 400 per tonne.
Tax policy in India is certainly contributing materially to green action as reflected in the various projects and programmes now funded via the dedicated cesses or via the central allocations.
The third interesting dimension is that tax on black money is cited as the first and foremost benefit from the recent demonetisation. The Survey holds that income-tax collections have risen due to increased disclosure.
Added to this, payments to local bodies and discoms also rose as demonetised notes remained legal tender for tax payments/clearance of arrears, including local taxes.
The Survey has also captured an eye-popping statistic on property tax. It says that evidence from satellite data shows that Bengaluru and Jaipur collect only 5-20% of their potential property taxes. Arihant jain (17Bal011)
People here in india don't realise the important of tax in a growing economy like India but the inherent problem with such a motion is that the there is an evident lack of engagement with regard to their policies about taxations on the side of authorities is a major cause of inconsiderate behavior of the stakeholders.
The research about the wrong allocations of resources for welfare schemes is not striking. It has become a common knowledge and it is again one of the reasons the public lacks belief in the economic policies of the government.
It is to be taken into consideration that only by taking the citizens into consideration and making them aware we can implement any policy.
Shrishti Mishra
17BAL110
The fact that 7 people pay tax out of 100 voters is very disheartening. This shows where our country stands. When many government officials and politicians themselves don't pay tax how can u except a laymen to pay tax. It happens so that many politicians try to escape the tax barriers through wrongful means. If a change has to be made then people should start voting for the right leaders . In the case of migration for work I guess it is justified if people don't find jobs they will obviously migrate . there will be brain Drain if the government does not provide jobs. In the case of GDP I would just say if the government can not generate jobs how will the GDP increase. I would conclude by saying these are chain events we should make changes in grassroot level if not our growth will remain stagnant..!!!!
Iaha B D
(17bbl014)
Now this is the survey which shows the ground reality which exists in our country. Being the greatest democracy is okay. Having a huge numbers of voters is okay but what is shown through the survey is bit astonishing. What is need to be done is after we have analysed what the problems are we should work on solving those problems .
It is also shown that how there is brain drain kind if situation going on in our country . The need currently is to utilize these great minds fir welfare and development of our nation .
The problem of how our country is perceived wrongly and that is what reflects in our ranking has a lot affect in international world .
There has also been described the problem of improper application of the policies which are mainly made for the deprived class but who are not actually benefited by it . There needs to be a proper analysis of how these benefits can be properly channelised and can be made available to the class of people who actually need it.
There is also this problem of not utilizing the potential tax sources and it shows how we are losing onto something great source of income which may in future if utilized may give some benefit for the development of our country .
By seeing all these problems the major problem what our country faces according to me is the problem of proper policies which are to be made for solving these issues . No matter which government we bring and whatever tool we use for bringing the necessary changes required in our country , until and unless we make the proper policies these try for change may not work . Naman Sharma 17bal033
The above study has shown different problems that Indian economy still facing. Though India is considered as developing economy but still it has many loopholes which is preventing it from coming up in the race of developed economy. As the study shows there are only 7 taxpayers over 100 voters, this shows that citizens are not willing to pay taxes as a result rating agencies have upgraded China, while India’s credit rating has remained unchanged. This shows that government is unable to convince people to pay tax as people see tax for welfare of their own.The government also fails in some areas as we can see that poorest 40% are getting only 29% of total funding. Also China’s credit rating was upgraded from AA- to A+ but India's credit rating remained unchanged at BBB-. Also there are some states which collect only a small amount of their potential property tax.
Moreover, India has huge labour market as compared to other countries but government fails to generate employment opportunities to suffice the need of young employable population and this leads problems like unemployment and migration of young population towards other countries.Also the problem of educated unemployed youth has becoming huge backdrop in development of Indian economy.
All these problems need urgent attention and immediate steps are required to be taken for the welfare of people, state and society.
Yash Jain
17BAL121
The fact as stated in the first statement" Indians on The Move
New estimates based on railway passenger traffic data reveal annual work-related migration of about 9 million people, almost double what the 2011 Census suggests." shows the poor infrastructure and economic structure of our country. People in our country waste thier limited sources of time and money daily on going to and from work. According to Washington post"At the societal level, people who commute more are less likely to vote. They're more likely to be absent from work. They're less likely to escape poverty. They have kids who are more likely to have emotional problems." This causes overall degradation of our youth and manpower. Economic ripples of this can be seen on our present society
If our people are provided with residential facility nearby, they are more likely to be punctual and mentally more active. This fact simply displays that even small things like 40 min extra commute to work can effect our economy negatively.
Shubhsmita
17BAL051
7 taxpayers for 100 voters!! it is something that requires our immediate attention and focus.The first question that comes to our minds is that who are we supposed to blame for this gap? Tax in our country is political rather than being a subject of economic Prudence. Black money, non-compliance and utter disregard to rules has been a bane for Indian economy, the above given statistics are nothing but a harsh outcome of it.
India claims to be developing it's economic status in the world but it is doing that at the cost of constantly widening the gap between the rich and the poor, our tax system is so designed that the rich is getting richer and poor even more poorer . By it's constant so called development India is creating new loop holes and flaws in it's economical structure everyday.And if this continues to happen we must keep ourselves ready for some more astounding facts to come in the future
Tanisha Prashant
17bal055
1- 7 taxpayers out of 100 voters it is not a good sign for a developing economy like India it shows that there is the taxpayers are very less in India and there can be 2 reasons for that low level of taxpayers ;- 1) One reason is that people try to dodge from government to pay taxes they try to use the loop holes to do tax evasion like government has the policy that if your income exceeds certain amount than you need to pay taxes so that the amount they receive from taxes can be utilized to do welfare of the poor sections of society but people tries to evade paying taxes and 2) another reason can be that people there are very less number who has a stable income so that they can pay taxes and this is the situation than it is a shameful siuation for a country like india where a large section of society is poor .
2- The allocation of funds were unequal or there is a missalocation of funds that the poorest 40% ones receive only 29% of total funding well this allocation of funding also suggests that why only 7 taxpayers are there out of 100 voters because of missalocation of funds there are less resoureces avialable with poor ones and thus increses the ever larging gap betwwn the rich and the poor
3- there is also a less talked issue in the survey dealing with potential property tax , the property tax is the main source of income of urban corporation and according to survey Jaipur and Bangalore can increase that property tax to 5 to 20 times the survey also cities the " poor assessment rate, weak collection efficiency, flawed methods for property valuation, loss on account of exemptions, and slack enforcement as the main factors behind poor realization of the property tax".
4-the survey also shows the work related migration based on railway passenger traffic data which shows that people still needs to migrate from thier houses for work due to lack of availability of jobs in their place especilally in rural areas . The data shows that the migration has almost doubled itself which means that there are lack of jobs in rursl areas on which govern ment needs to work on
Aryan Singh Chouhan
17BAL012
1- 7 taxpayers out of 100 voters it is not a good sign for a developing economy like India it shows that there is the taxpayers are very less in India and there can be 2 reasons for that low level of taxpayers ;- 1) One reason is that people try to dodge from government to pay taxes they try to use the loop holes to do tax evasion like government has the policy that if your income exceeds certain amount than you need to pay taxes so that the amount they receive from taxes can be utilized to do welfare of the poor sections of society but people tries to evade paying taxes and 2) another reason can be that people there are very less number who has a stable income so that they can pay taxes and this is the situation than it is a shameful siuation for a country like india where a large section of society is poor .
2- The allocation of funds were unequal or there is a missalocation of funds that the poorest 40% ones receive only 29% of total funding well this allocation of funding also suggests that why only 7 taxpayers are there out of 100 voters because of missalocation of funds there are less resoureces avialable with poor ones and thus increses the ever larging gap betwwn the rich and the poor
3- there is also a less talked issue in the survey dealing with potential property tax , the property tax is the main source of income of urban corporation and according to survey Jaipur and Bangalore can increase that property tax to 5 to 20 times the survey also cities the " poor assessment rate, weak collection efficiency, flawed methods for property valuation, loss on account of exemptions, and slack enforcement as the main factors behind poor realization of the property tax".
4-the survey also shows the work related migration based on railway passenger traffic data which shows that people still needs to migrate from thier houses for work due to lack of availability of jobs in their place especilally in rural areas . The data shows that the migration has almost doubled itself which means that there are lack of jobs in rursl areas on which govern ment needs to work on
Aryan Singh Chouhan
17BAL012
The fact that 7 people out of 100 voters paying the tax is something peculiar.This shows how the people of our country stealing the tax and hinders themselves from the progress of nation. The rules and regulation regarding tax evasion are not very strict in india which encourage the people to evade the tax, somehow government policy also responsible for this because the very nature function of our government is to aware the people regarding tax payment and also frame strict legislations for those who absconding from paying the tax.
point no.3 ''welfare spending in india suffer from misallocation'' is another major problem in india. every year thousands of welfare policy launched by government but fail due to lack of implementation. crores of rupees devoted to the welfare scheme every in the government official document but at the ground reality results zero. our claim of world largest democracy failed when poor people even not get one time food properly.
Mohit paliwal
Roll no. 17BAL090
Tax ratio similar to Rwanda, but wants to beat China: That’s India
today India’s cumulative tax mopup in percentage terms matches only those of the poorest African countries like Rwanda. That’s a sorry figure for a nation that aspires to be counted among the developed economies in the near future.
In fact, that’s the case for many Asian economies. Mitsuhiro Furusawa, Deputy Managing Director of the International Monetary Fund, recently warned that most Asian countries are not collecting enough tax to meet their goals.
India’s tax-to-GDP ratio is way below global standards. If the economy needs to accelerate growth by boosting infrastructure and investments, tax collection has to go up quite a bit.
“They need to boost revenue by taking steps at home and by working with other countries,” Furusawa said on Asian economies.
Post demonetisation, India added some 9.1 million people to the list of taxpayers, according to CRISIL. Economic survey 2016-17 revealed that India has only seven taxpayers for every 100 voters, which is very low compared with G-20 standards.
At 16.6 per cent, India’s tax-to-GDP ratio is far less than 34.3 per cent average for the members of the OECD (Organisation for Economic Co-operation and Development), which counts US, UK, Australia, Canada, Japan, Germany, France among its 35 members, and below those for many emerging economies.
“The economic benefits of GST in the medium to long term would be from two major factors: (1) efficiency gains from a simpler tax system, more productive business operations, and creation of a one nation market for production and consumption, and higher government revenues due to expansion of the tax base as compliance increases and unorganised segment shifts to the organized segment,” Kotak report said.
Motilal OswalBSE Securities said the GST would be revenue accretive for the government, as the tax base will expand, even though tax rates on various products remain close to the current effective tax rates.
Under GST mechanism, efforts have been taken to reduce human interference and utilise technology which would not only help in decision making but also ease compliance and avoid any malpractice, Centrum Broking said in a note.
VAT or GST model has been implemented in around 160 countries so far. Malaysia’s rate stands at 6 per cent, Indonesia’s at 10 per cent, China’s at 17 per cent, while United Kingdom’s rate stands as high as 20 per cent.
Devansh jain
17BAL020
India is far from being a full tax-paying democracy with about 5.5 per cent of the people who earn paying tax and only 15.5 per cent of the net national income being reported to the tax authorities, according to the Economic Survey tabled in the Parliament on Friday.
The survey estimated that just four per cent India’s voters are taxpayers, though it should be closer to 23 per cent, and 85 per cent of the net national income fall outside the tax net.
The tax to GDP ratio at 16.6%, as a result, is well below that of the emerging market economies of 21 per cent and OECD average of 34 per cent. The survey, however, pointed out that the democracies with higher ratios took a long time to strengthen tax capacity. “Any harsh judgement of India’s performance must be tempered by historical differences in the evolution of India compared with other democracies.”
On the expenditure side, India’s spending on human capital, education and health, to the GDP ratio is the lowest among BRICS and lower than the OECD and emerging market economies averages. They are in fact, lower than those of comparable per-capita GDP economies such as Vietnam, Bolivia and Uzbekistan.
To widen the tax net and raise revenue for spending on India’s human capital development, the survey called for bringing rich farmers into the tax net, raising property tax rates and phasing out tax exemptions.
There should be “reasonable” taxation of the better-off, regardless of the source of their incomes, whether it is from industry, services, real estate, or agriculture, Chief Economic Advisor Arvind Subramanian told reporters after the survey was tabled.
The survey also seeks to address the question French economist and author of best-selling book Capital in the Twenty-First Century Thomas Piketty raised during his recent trip to India: Should not Indian elite pay more taxes to provide for greater spending on health and education?
If the UPA Government had not raised in the 2012-13 the threshold level of personal income tax, the survey calculated that an additional 1.65 crore income tax payers would have got incorporated.
The tax-GDP ratio would have been 0.32% higher as Rs.31,500 crore additional tax revenue would have been collected.
The survey also seeks to analyse the levels of inequality in India, which Prof. Piketty said during his visit, he is unable to assess owing to unavailability of data.
According to the survey fast growing years in the 2000s were in fact associated with rising inequality at the very top end of the Indian income distribution.
As in many countries, there has been a growing concentration of income at the top: in 2013-14.
The top one per cent, 0.5 per cent and 0.1 per cent of people in the overall income distribution (the three highest income groups) accounted for 12.4 per cent, 9.4 per cent and five per cent of the entire income of the Indian economy.
At these levels, inequality in India, it said, is comparable to that in the U.K. and lesser than in the United States.
Jatin Khushalani
17BAL024
the mentioned ratio of tax payers to no. of voters is inversely proportional to the complexities of our taxation system. Complexities are such enormous that even a common man fears entering the premises of govt. department. Fiscal illiteracy, due to unawareness and lack of any awareness programme, further impacts it adversely.
Idea of Credit rating makes sense in regard to the heath of any economy but, India's rating in contrast with China and declining of China's economy thrashes the credibility of the ratings.
The essence of inclusive development can be found in the quality of expenditure for the weaker society. 29% for 40% poor in itself is against the socialist character that the preamble of the great constitution proclaims for the country.
In regards to the low collection of property taxes which itself is a big issue, the vulnerability further increases by siphoning of the collection by the political ruling class.
Suruchi Bajpai
17BBL053
It is true that number of people paying income tax in India is abysmally low . Our tax- GDP ratio of approx 11% s much less compared to developed economies ( Norway has 27.3 % and Sweden 21.5 % ) On the top of it , a significant proportion of these taxpayers are salaried people who have no means of concealing their taxable income .
It would be shocking to know that till recently only about 42,000 odd people were declaring an annual taxable income of Rs 1 crore and above . This in a country of 1.25 billion population , to say the least , is laughable and preposterous. Just around 3% of India' s population pays income tax as against over 20 % in China and 45% in USA . Only 3 Indians pay more than Rs 100 crores a year in income tax. This is ridiculously low in a country where the number of luxury vilas , cars and high net worth individuals are growing exponentially.
The reason is pretty clear and simple: tendency among rich and powerful Indians to evade taxes . There are set of accountants working overtime to explore ways and means to deprive government of legitimate revenue.
Some of the broad reasons for such low number of tax payers are :
1 poor ethical standards among Indian corporates
2 the size of the parallel economy is almost as big as the legitimate one
3 Indians by and large are very conscious of their rights but not of their responsibilities towards society and the nation
4 Lack of fear of & respect for law of the land . Vast majority still believes that they would be able to manage without payment of all legitimate taxes
Following steps should be taken to increse the number of taxpayers and boost direct tax revenue :
1 The techniques of data analytics and big data should be extensively to track large unaccounted transactions and tax evasion.
2 Top few taxpayers should be awarded to incentivise honest tax-payers . Many countries have system of giving honour and dignity to tax payers . In Japan, for example, honest tax payer has the privilege of getting photographed with the Emperor.
3 Taxation processes and systems should be simplified to make it user friendly.
4 Deterrent penal measures should be taken against major wilful defaulters to send across clear and unambiguous message against deliberate acts of tax evasion.
5 Discretionary powers of tax authorities should be reduced.
6 Physical interface between taxpayers and tax authorities should be minimised , if not eliminated altogether.
7 Outreach programmes should be periodically organized to create awareness among assesses and take tax- compliance out of the clutches of chartered accountants
Anusha
17bal010
There is a wide gap between India’s political democracy and fiscal democracy :
This year’s Economic Survey tells us “A picture that speaks a thousand words”. It shows that in Norway, for every 100 voters, there are 100 taxpayers. In India for every 100 voters, we have seven taxpayers. It is as if the voters form the government, and the taxpayers help fund it. Of course, these numbers are only for people who pay income taxes. The burden of indirect taxes is upon all of us(the common people).
India’s ratio of direct to indirect taxes is 1:2, which is exactly the opposite of most advanced economies. We need to urgently correct this situation, for the sake of efficiency, fairness and reducing inequality. Paying direct income tax from your pocket is to be seen as your membership fee for this robustly functioning democracy. That’s the way of reducing the wide gap between our political and fiscal democracy.
BIASES IN PERCEPTION :
Difference in credit rating between India and China is not "Biases in perception" as the article says. It is because China has trade surplus with almost every country on earth and its GDP has grown beyond our reach. It has excellent infrastructure including Maglev trains and amazing network of roads. While we are still using trains tracks from colonial era. Our so called roads do not fit any definition of "road". They are ridden with potholes, there are hardly any roads with footpath that stretches beyond 100 meters before it is interrupted by a light pole or drainage hole or a shop or a garbage tin. There are no lanes on any roads and hardly anyone cares. Frustrating part is, we are not even bothered by it and we keep patting our back and prefer to live in make believe world.
Income divergence: governance or development model?
While individual income inequality in India and its potentially adverse social consequences have been discussed fervently, regional inequality among the different states of India can perhaps have a more adverse impact on the political economy of the country. India is a complete outlive in the world in experiencing such regional income divergence vis-Ã -vis most other large federal economic unions such as the US, China, Canada and the European Union
UMANG SETHI
17BBL057
SECTION: C
Migration of workers in India is at an all time-high.Inter-state migration is at its peak.The migration pattern showed that less affluent states saw more people "migrating out" while the most affluent state are largest recipient of migrants. INCOME: The top one per cent,0.5 percent,0.1 per cent of people in overall income distribution accounted for 12.4 %,9.4% and 5% of entire Indian economy's income.this fact clearly indicates the improper income distribution as their are problems which we all know but no solution in present time is costing poor people present and their future. Social welfare programmes:the new evidence on weak targeting of social allocation provides us information about misallocation of funds,resources.Various social welfare programmes look good on paper,but their implementation is the issue due to which several classes ,community has to face the final consequences.If there will be proper allocation and implementation of funds and resources,it may led to decrease in poverty ratio and provide a decent life for masses. Property tax potential:According to economic survey,Bengaluru(India's IT capital)can collect 7 times its property tax revenue.Bengaluru joins Jaipur which managed to collect only 41 correct rupee but having potential of 380 correct to 799crore,just 10 times.The major factors contributing to poor realisation from property tax are poor assessment rate,weak collection efficiency and loss on account of exemption etc. All these 8 different facts clearly show the true picture of country which are not so good and steps are required to be carried out for problems. SHOBHIT-PORWAL 17bbl045 division -C.
India, the young nation, with fire in the belly and a mouth ready to burn instantly. Thousands of instances, where while walking, people in a group criticize government and structure of India, or be "cock-a-hoop" with name of India. A few months back, an uncle, enthusiastic of me becoming a lawyer told me how lawyers and accountants earn crores of money by mastering upon their own pocket filling skill of filling pocket of their clients. Flabbergasted, frankly somehow I couldn't question the integrity and thought of my own pocket which later struck me hard to question myself when I question India and when others question India. The Panama scam is one big instance of tax evasion in millions. The anonymity that the gaff blower has to keep now ( is he dead? ) makes us question the very human nature of brutality and selfishness. When such people have a tryst to make a government, how can one confide in such a state? Over decades tax evasion had become a way of life. We are largely a tax non-compliant society. When too many evade tax, the burden falls on those who are honest. The intra state dynamics tells us that people in search and need of things, and with hopes high move to different places. But this dynamics has a breaking impact as to accomodation and state wise contribution to GDP. As is the case with international migration of individuals, so is the case with inter-state migration of individuals. Also, being the prospective YOUNG NATION, the onus is now on the government to fairly exploit and utilize youth for helping India be Usaain of Nations when it comes to economy. With such a speed, the other problem is that of justice. Economy is such where one has to run through the other to get first but this destroys the covenant we had while agreeing upon a sovereign. We can see how policies are running over the honest people and distributive justice is lost with a clear virtual CAPITALISM ( IS SOCIAL a point on our revered CONSTITUTION? ). The policies have to be allocative and have less onus on individuals which are less favoured by fortune. The other aspect is that of evasion of Property Tax. The satellite data qualify us to question this evasion and may bring us to Benami transactions which can be used not only for acquiring properties which one is not qualified to, but also can help evade taxes.
Not only the nation-state as a whole, but individuals have also to improve and be cohesive with policies being made. The pace has to have a balance in both the aspects so as to make India Just Ussain with camera click of TRIUMPH!
Abhirakshak Rajpal
17BAL003
The facts as mentioned in the Article viz movement of Indians have increased, growth in GDP, increase in trade as against china indicated that the Indian economy is in sound position. There is much prosperity as against earlier. There are big chunks of people which are engaged in expenses of their money for luxury items. Apart from this, increase in sale of consumer items clearly showed that there is increase in income of people. However, at the same time, we see from the article that only 7 people out of 100 are paying tax. In other words, looking to the size of Indian economy and capacity of people to spend money , the numbers of tax payers are comparatively less. This has resulted into less collection of revenue. Therefore, the Government is constrained to allocate their fund for development work. For example as mentioned in Article , in the cities like banglore and Jaipur, the property tax share is only 5% to 20%. Under such circumstance, how is it possible for the Government to carry out the basic development work like construction of Roads, provide drinking water, electricity, health and education to the poor sections of people of these cities.
Another aspect which clearly emerges from the facts of the Article that one section of the society which is well to do and have capacity to pay the tax are avoiding to pay the tax in the veil of financial democracy. For analyzing this situation, we have to go back in the period of 80’s when the Indian market was protected by the Government and there was no liberalization in the economy. The products manufactured in India were not competitive with world market. This has all happened on account of either imposition of less tax or giving other financial support. As a result, the business man had grown in such atmosphere which set up their mind to not pay the taxes. In other words, they became of such attitude to do business on account of saving the taxes though they were quite capable for the same. This has widened the society on economic front. One section of the society had rapidly increased their wealth and became more prosperous. On another hand, a section of society which was in need of support from the government could not lift themselves and became more weak and poor. Therefore, though the economy is sound but there are still problems like poverty, unemployment, low rate of literacy, suicide by farmers and middle-class people etc. Moreover, crime rate has also increased. The terror of Naxalities in some areas of India is nothing but the baby of such policies.
In my opinion, it is right time when the government should think about the amount of financial democracy given by them. There is need of financial discipline in the society. The people who are capable to pay the tax should discharge their tax liabilities. It is seen that the working age group has also increased in India. It is good initiative by the government that they have introduced many schemes like startup looking the increase of young working group in society. These people are of competitive nature and do their business based on skills and technology. Therefore, we can expect that they will contribute to the society by not only improving the economy but also increase the revenue of the government by paying legitimate taxes. It is in the interest of society that the government should make every effort possible to curb the tax evasion and increase the revenue , so that the society can be developed in all ways.
Krati Jain
17BAL026
After studying the article ,we can come to a conclusion that,although India is developing ,yet in some areas it is lacking behind to be developed in real sense.
Further we can conclude that :
a) poor infrastructure available in the country ,because of which people need to travel for work via railways on a daily basis,which ultimately results in low productivity,as people will become tired after traveling and most oftenlly absent from work.
b)The fact that out of 100 people only 7 are the taxpayers,seems quite shocking,but we should know one thig that this is the only mst probable outcome which could be expected from people who don't know that why they have to pay taxes,what benefits will they get from doing so .
Thus depicting the failure on the government part,that it failed to make people aware about the idea ,use of revenue from collected tax.
Government should make them aware that the developmental works are done from revenue from taxes,and f there would be no taxes ,then no developmental work,no growth.
The article highlights many areas in which India is lacking behind and needs to be given immediate focus and attention.
VARTIKA JAIN
17BAL125
There is a huge gap between India's political and fiscal democracy. Fiscal democracy still seems like a distant dream because paying taxes is seen as burden rather than duty. Therefore govt. resort to low taxes to get elected. it is evident from the fact that 7/100 voters pay tax. and lo tax to GDP ratio of 17%. This leads to higher borrowing by the govt. which results in high fiscal deficit. Leaving higher burden on the future generation and cripples fiscal democracy for future govt.
And also China's credit to GDP increased from 142 to 205 % while its growth decelarated, yet China's credit rating upgraded from AA- to A+ . In contrast, India's credit to GDP has been only around 70%, yet India's credit rating has remained unchanged at BBB- although India has exceptionally high willingness to pay.
There is substantial misallocation of welfare fund i.e, those most needy aren't the ones who gets most of the welfare funds from social programme. One of the main reasson is that the institutional & effectiveness of targeting is related to respective states institutional & implementation capacity. For eg- state such as Tamil Nadu & Andhra Pradesh which do not have large proposition of poor avail themselves of the programme to a greater extent than poorer states such as Bihar.
The spatial dispersion in India continues to rise unlike the rest of the world i.e., the less developed states aren't catching up with more developed states. This mean despite the improvement done in poorer states such as Bihar, Chhatisgarh he development is neither strong nor durable enough to change the unnderlying picture of growing inequality.
Probably owing to the earlier point, work related to migration has been increasing . Compare to 2011 census it has doubled. There has been around 9 million people migrating for work related purposes. The combine working age population that is people between 15yrs to 59yrs has declined in advanced countries including China & Ruussia which will see a fall of over 20% . Whereas India's working age to non-working age population will be lter and at a lower level than other countries and will also last longer.
The openess index showed as the ratio of trade in goods & services to GDP has over taken china. India's internal trade is also comparable with other larger countries. So in contrast, India's expression is more balanced with current account deficit rather than surplus. While service exports from India might displace workers in advanced countries, the workers in advanced countries may simply move to complementary task.
SAMAR PRATAP
17BAL105
It is such a shame that 7 out of 100 people in the country pay their taxes, which in a nation of over 1.3 billion puts an insane amount of burden on the existing working-class tax-abiding population.
And even though, the working age to non-working age population is relatively better than other countries at this point in time, upcoming technologies such as machine learning, artificial intelligence and 3d printing will only lead to higher unemployment in not only blue collar jobs, but also high skilled jobs such as lawyer, designers, accountants. This will lead to massive unrest in the unemployed youth all over India.
A future is not far, where along with the untapped property tax, a new robot tax will be required to charged, to sustain the population.
Shruti Khanna
17bal049
India has confronted the issue of movement to different nations for quite a while. We along these lines authored the expression "mind deplete" and have attempted different approaches to stop this procedure where the erudite people leave the nation for better openings for work. Strategies like Make In India, to expand openings for work, financed advanced education, motivating forces for NRIs to restore all appear to be useless. The many explanations behind this pattern like way of life, openings regarding examination, new businesses and other self actualisation needs which individuals take a gander at and don't discover in India and subsequently migrate.Remedial strategies ought to be taken in financial terms as well as mentally o avert additionally deplete of cerebrum as relocation brings down workforce as well as obstructs the development of the economy because of deficient learning and scholars.
The gradings speak to the credit reimbursing limit of the nation. India is a creating country and is caught in the horrendous obligation cycle which constrains the nation to take credits to reimburse existing advances and furthermore prompts financial shortage which India has been endeavoring to address in each financial plan go by it throughout recent years. Increment in Gross domestic product can be because of various variables like increment underway, increment in pay of certain rich segments of the general public which not the slightest bit details in the expanded limit of a nation to reimburse advances. There should be a superior administration of the assets which brings about an expanded Gross domestic product as well as in higher universal appraisals.
The misallocation of assets is not an issue for India just, but rather for the world on the loose. As it is said 1% of the total populace utilizes 70% of the world resourses. Furthermore the bay of the rich and poor in India, augments and extends constantly. The rich keep on getting benefits for their position while the poor keep on being abused, which shocks no one The essential arrangements should be changed and real issues that prompt a circumstance like this, similar to defilement should be tended to at the earliest opportunity entirely.
With respect to the citizens and the charges. Significant income of the nation is not from coordinate assessments but rather aberrant expenses which are backward in nature. circuitous duties are charged on the utilization of items and the items can be utilized by bring down wage bunches and additionally high wage bunches consistently, which is unjustifiable and questions the arrangements. Our expense arrangements have different provisos and individuals utilize these to evade paying taxes.Our laws should be executed all the more entirely and be more strong yet not unbending. Unbending nature stops development and thusly can put a terrible look ahead for whatever is left of the world, as in the Vodafone case. Laws are intended to ensure the privileges of the natives and not to pester them. This should be remembered, by the approach creators while figuring strategies. I say so since this perceptions and issues come down to wrong strategies and their usage.
Only 1% of the total population paid tax on their earnings in fiscal 2013.Total tax paid during fiscal 2013 was Rs. 1.14 lakh crore,according to the income tax department.Two years later,in 2014-15, this had increased to Rs 2.65 lakh crore.
That is just about 2.4% of India’s GDP.Which means the rich are not paying enough taxes. More than 50% Indians are engaged in agriculture. Agricultural income is exempted from tax in the country. With Such a large population engaged in agriculture and a huge gap between the rich and the poor,the number of taxpayers as a percentage is likely to be low.But the concern is that those who needed to pay taxes actually paying ? Those paying the taxes actually paying the right amount ?
Another reason for low tax collection is that most of the labour in the country is unorganised sector,they are paid in cash and are part of the informal economy.
Regardless of the duration of their stay,labor migrates face myriad challenges at their destination in a country that is dizzying in its diversity of language and culture.Among the challenges restricted access to basic needs such as identity documentation,social entitlements,housing,and financial services.Many migrants especially those who relocate to a place where the local language and culture is different from that of their region or origin also face harassment and political exclusion.
SARTHAK CHAUHAN
17BAL045
Mounting tax disputes and slow disposal of cases make India a difficult tax jurisdiction. But the government has been working towards creating an environment where not only are disputes minimised, but the judicial processes are also expedited. The committee headed by retired judge R.V. Easwar has already come out with a set of recommendations to simplify the regime, and the government has accepted most. There's more to come.
Since July 2014, the Income Tax Department has issued 23 circulars to help tax officers become more efficient and approach cases with more clarity. The apex court, too, played its part by constituting a special bench to hear only tax cases and deposed 197 cases in 2015. The special bench is likely to continue hearing cases this year as well. The government has also come up with a direct tax dispute resolution scheme to clear pending cases before CIT(A) and cases involving tax demand due to retrospective changes in laws. The revenue department is hopeful that a lot of people may come forward and pay their dues to settle disputes.
While such one-time measures may be effective, concerted efforts to change the way the tax department thinks and works will be key to bringing down tax disputes and high pendency rates. However, if the government is serious about its 'ease of doing business' initiative, technology will have to play a major part to overhaul the Indian tax assessment system.
17bal087 lakshya chaudhary
It is a shame that out of 100 people in the country only 7 pay their taxes, which in a nation of over 1.3 billion puts an insane amount of burden on the existing tax-abiding population. In other words, looking to the size of Indian economy and capacity of people to spend money , the numbers of tax payers are comparatively less. This has resulted into less collection of revenue. Therefore, the Government is constrained to allocate their fund for development work. For example as mentioned in Article , in the cities like Bengaluru and Jaipur, the property tax share is only 5% to 20%.One section of the society had rapidly increased their wealth and became more prosperous. On another hand, a section of society which was in need of support from the government could not lift themselves and became more weak and poor. Therefore, though the economy is sound but there are still problems like poverty, unemployment, low rate of literacy, suicide by farmers and middle-class people etc. Moreover, crime rate has also increased.The fact that rating agencies have upgraded China, while India's credit rating has been unchanged- it is something that the survey tells us. As we can see that China’s credit rating was upgraded from AA- to A+ in December 2010 while India’s has remained unchanged at BBB-, it clearly shows that how China has progressed!
In my opinion, People who are capable to pay their taxes should discharge their liability of it as we can see that number of people who are working in India has been increased and are intelligent and motivated to boost the economy of our country India.
It is in the interest of society that the government should make every effort possible to curb the tax evasion and increase the revenue , so that the society can be developed in all ways.
Kunal Agarwal
17BBL023
The survey shows a very detrimental fact that we have only 7 taxpayers among 100 voters, which is a very tragic situation. As with the demonetization drive, it was also revealed that only 25 lakhs people declare themselves to be above the 5 lakhs cap for income tax. The study above also shows that cities like Bangalore and Jaipur collect only 5-20% of their potential property tax property, tax potential is large and can be tapped to generate additional revenue and for better governance. Work related migration is increasing day by day is because of the lack of opportunities available in a particular area and these lack of opportunities is because of the flaw in government schemes to provide employment. These migrations can be from 1 state to another but majorly it is from rural to urban.
Need of proper infrastructure for employment is urgently needed to stop high scale migration or else population in any particular city will increase to its fullest of capacity to sustain. Also the local people will suffer as the competition will increase for one particular job.
As for the taxpayers and the taxes. Major revenue of the country is not from direct taxes but indirect taxes which are regressive in nature. Indirect taxes are charged on the use of products and the products can be used by lower income groups as well as high income groups uniformly, which is unfair and questions the policies. Our tax policies have various loopholes and people use these to escape paying taxes. Our laws need to be implemented more strictly and be more solid but not rigid.
On CREDIT RATING the methodology employed by rating agencies is itself questionable.
Even on fiscal variables, it is questionable that China’s rating has been upgraded while India’s hasn’t.
In December 2010, it increased China’s rating from A+ to AA- and it has never adjusted it since, even as the credit boom has unfolded and growth has experienced a secular decline. In contrast, India’s ratings have remained stuck at the much lower level of BBB-, despite the country’s dramatic improvement in growth and macro-economic stability since 2014.
There are other factors that these agencies are ignoring, that make India capable of carrying more debt than other countries; it has an extremely high “willingness to pay”, for instance.
Karan Choudhary
17BAL085
India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). The Government of India has forecasted that the Indian economy will grow by 7.1 per cent in FY 2016-17. As per the Economic Survey 2016-17, the Indian economy should grow between 6.75 and 7.5 per cent in FY 2017-18. The improvement in India’s economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, Reserve Bank of India's (RBI) inflation focus supported by benign global commodity prices.
India's consumer confidence index stood at 136 in the fourth quarter of 2016, topping the global list of countries on the same parameter, as a result of strong consumer sentiment, according to market research agency, Nielsen.
India's gross domestic product (GDP) grew by 7 per cent year-on-year in October-December 2016 quarter, which is the strongest among G-20 countries, as per Organisation for Economic Co-operation and Development (OECD) Economic Survey of India, 2017. According to IMF World Economic Outlook Update (January 2017), Indian economy is expected to grow at 7.2 per cent during FY 2016-17 and further accelerate to 7.7 per cent during FY 2017-18.
The tax collection figures between April 2016 and January 2017 show an increase in Net Indirect taxes by 16.9 per cent and an increase in Net Direct Taxes by 10.79 per cent year-on-year, indicating a steady trend of healthy growth. The total number of e-filed Income Tax Returns rose 21 per cent year-on-year to 42.1 million in 2016-17 (till 28.02.17), whereas the number of e-returns processed during the same period stood at 43 million.
The fact that out of 100 people only 7 are the taxpayers,seems quite shocking to me ,but we should know one thing that this is the only most probable outcome which could be expected from people who don't know that why they have to pay taxes,what benefits will they get from doing so .
Thus depicting the failure on the government part,that it failed to make people aware about the idea ,use of revenue from collected tax.
Government should make them aware that the developmental works are done from revenue from taxes,and f there would be no taxes ,then no developmental work,no growth.
India as a country holds the potential to prove its capabilities in terms of economic development. In the prevailing situation India is suffering from few many problems like only 7 out of every 100 voters pays taxes, which is really concerning. Jaipur and bengaluru only counted 5-20 percent of their actual capacity/potential of collecting property tax. Now looking at this figure it clearly shows that the situation is really alarming and it’s a high time for the government to take on some constructive steps, because if this would remain the case , near is the time when India again ask for loan from the IBRD. Thus what could be done, well one would be the case that there should be a radical change for the digitalization of every cash transaction,so that RBI and the finance ministry could keep a tab on each individual personally. Government could more strengthen the whistle blower act, which will allow the government to keep more and more eyes on the suspicious person. Thus such option will do prove beneficial to the government.
Inequality in the distribution of income , increase in the migration to almost double in 4-5 years , and the most shocking and dangerous one that the states within the country are not been getting actual fund allocated by the central government. Awareness has to be spread about this but to be more effective is the coming youth which would throw away this deep rooted evil of corruption. And in this educational institutions plays the major role to train these young mind in the way it has to be. Whereas government has to come into play and put the issue of unemployment on the top in urban as well as rural areas and this has to be done in all the sectors accordingly.
Now finally taking china into the account, as we all can witness the fast pacing speed of china as to that compare with India, it also brings a sense of healthy competition with the other state in terms of economic development. Trade with china should be increase or not is a present scenario moot point , but looking at it from a long run perspective we just cannot stop the trade but reduce the trade with china. Because a radical change in this would affect more to India as to compare to that of china. Innovation could be a game changer solution to increase its GDP and to increase its credit rating thus. And this could be done by allowing young minds to come together on a portal and put some interesting ideas to mitigate this problem along with the economic stalwarts. And in this way we can look up to a more efficient economic system for India.
17bal123
Abhinav Bishnoi
as seen India lacks behind china in various parameters where she is also ahead in various others, but as the article raises a very disheartening fact that there is only 9 tax payers among 100 voters the question is were is the remaining 91 people? and second why do we have such a great gap between the number of voters and number of tax payers?
addressing to the questions, actually India is a land where paying tax is a task involving huge amount of burden the procedure and red tap ism in the machinery makes people to ignore the fact that they are the citizen of the country and they have a duty to pay the tax moreover many people in India earn less than rs.250000 as their yearly income as because the bar is set at this amount many of the people get cleared off. other reasons can be the huge amount of corruption which people don't want to disclose and the policy that people involve the job of farming are exempted from it. now if we see a land where still 50 % of population works as farmers we indirectly also clear them from them paying taxes
my personal opinion says that all these policies are ages ago and need to be reconsidered as now many farmers earn more than a person can imagine it would be unfair if they are not taxed to all citizens. government is trying to ease up the the process of filing the income tax, which was really cumbersome few years back, it was seen that after demonetization there was a just of 23 % in tax payers which is very high if compared to earlier data
so we can say that this gap need to be addressed as soon as possible and steps must be take by the government to ease up the process and remove the corruption involved in the machinery
NIKUNJ MAHESHWARI
17BAL093
Asymmetric information can have negative as well as positive effect. It is obvious that everyone cannot have information about everything therefore everywhere some people will have more knowledge than others. Manufacturer or seller will obviously know more about his product than the buyer or a service provider will not tell the negatives because he has to survive in the market.
Information failure will lead to exploitation of customers but not everytime because we can't consider profit margin as exploitation but yes as mentioned in the article asymmetric information causes moral hazard and adverse selection the buyers have to be more aware considering today's scenario.
For example while going to doctor or after consulting the doctor one should research about the same and same applies when buying any product like car.
YASH DADHICH
17BAL120
"7 taxpayers out of 100 voter"is an alarming point but not a surprising fact as it is predictable.For India, it is required to make laws and harsh policies to barred people from tax evasion.People in India wouldn't like to pay tax as they have thought in their mind all politicians are corrupt and large part of tax goes in pocket of politicians in the schemes of public welfare, it is important for the people of India to know the overall development of their country and the areas in which the India is leading the most so people have better mindset rather than the belief that society exist the same as they were.It could help the government of India to have more tax even if there is contribution from 30 taxpayers out of 100 voters. It will create a vast difference in tax and play an vital role in overall development of India.
DEVESH JAIN
17bal022
India is a very diverse and fast growing economy with lots of possibilities and opportunities. The requirement is to analyse and mould them according to the need of hour. The survey has highlighted many things about the growing economy of ours and also the loopholes which are required to be analysed. This clearly shows that how the trade of India is increasing within itself and also internationally as it also exceeds China.The fact that 9 million people migrated to other city is so embracing for india , as it is huge no. Of people that are migrated and there is only one reason of migration i.e. to seek emplyment. As we see in many parts of our country there is no employment people need to shift or migrate from there native place beacause of unemployment, and if people migrate constantly there will be huge population in one city which will increase competition and again the cause of unemloyment will arise so they should be peovided employmwnt in there places so that they can earn and live at their own place.It is a shame that out of 100 people in the country only 7 pay their taxes, which in a nation of over 1.3 billion puts an insane amount of burden on the existing tax-abiding population. In other words, looking to the size of Indian economy and capacity of people to spend money , the numbers of tax payers are comparatively less. This has resulted into less collection of revenue. Therefore, the Government is constrained to allocate their fund for development work. For example as mentioned in Article , in the cities like Bengaluru and Jaipur, the property tax share is only 5% to 20%.One section of the society had rapidly increased their wealth and became more prosperous. On another hand, a section of society which was in need of support from the government could not lift themselves and became more weak and poor. Only 7 out of 100 taxpayers show a serious concern regarding the current tax evasions going on in our country.
17bal038
Pragati Mishra
well this article comparing india and china actually shows that how a organisation/country has not managed its assets properly plus the need for awakening is needed which will make tax paying a look as a duty instead of a burden which people see it as due to different regulations and greed of people and it is possible to gt ahead of china we just need to apply our brains in a positive aspect and earn money with transparent and fair trade practices as everyone believes too so we cannot blame either the government or the citizens but it is a fault of both sides which still can be fixed if India wants to be a global power
17bal064
Aarsh brahmbhatt
Post a Comment