Central Govt Finds It Difficult To Raise Money For Expenditure, Welfare Schemes As Revenue Declines
The truth of the ailing economy has come to light owing to recently released GDP figures. Recently released figures show that the government's revenue receipts are declining and meeting expenditure would be akin to tightrope-walking.
Moreover, international rating agency Moody's has downgraded India's rating, making it a less desirable destination for investment.
In the midst of a crisis-ridden economy, the biggest challenge before the government is to raise money for its expenditure and welfare schemes. All the statistics are showing that as the economy slows down, its income is also decreasing.
Gross tax and corporate tax revenues were going up rapidly in the year 2016, but by the year 2020, it has turned red. Last year in September, when the central government was under fire for mishandling economy, Finance Minister Nirmala Sitharaman announced a concession in corporate tax. The aim was to spur investment but to no avail.
Later, not just government saw revenue taking nose-dive due to exemption in corporate tax, but this didn't even excite investors, fearful of prevailing market conditions. This has now proved to be a double whammy for the govt since investment has not increased and corporate tax collection has suffered further..jpeg )
For the year 2019-20, the government, which aimed to collect tax worth 19.32 lakh crore, has been left behind by almost 10 percent, due to which the fiscal deficit has also increased to 4.6 percent, highest since 2013.
Adding to the woes, the International rating agency Moody is only a step away from junking the Indian economy. But economists are wary of the future as they believe the worst is yet to come as the financial year 2020-21 began at a time when the country was in lockdown and economic activities were at a complete standstill.
In the midst of a crisis-ridden economy, the biggest challenge before the government is to raise money for its expenditure and welfare schemes. All the statistics are showing that as the economy slows down, its income is also decreasing.
Gross tax and corporate tax revenues were going up rapidly in the year 2016, but by the year 2020, it has turned red. Last year in September, when the central government was under fire for mishandling economy, Finance Minister Nirmala Sitharaman announced a concession in corporate tax. The aim was to spur investment but to no avail.
Later, not just government saw revenue taking nose-dive due to exemption in corporate tax, but this didn't even excite investors, fearful of prevailing market conditions. This has now proved to be a double whammy for the govt since investment has not increased and corporate tax collection has suffered further.For the year 2019-20, the government, which aimed to collect tax worth 19.32 lakh crore, has been left behind by almost 10 percent, due to which the fiscal deficit has also increased to 4.6 percent, highest since 2013.
Adding to the woes, the International rating agency Moody is only a step away from junking the Indian economy. But economists are wary of the future as they believe the worst is yet to come as the financial year 2020-21 began at a time when the country was in lockdown and economic activities were at a complete standstill.
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