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.
