The Budget papers show that tax concessions have doubled from Rs 2.3 lakh crore in 2005-06 to Rs 4.7 lakh crore in 2010-11. Total revenue foregone from FY’06 to FY’11 works out to a whopping sum of Rs.21.25 lakh crore.
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The taxes foregone because of tax concessions amounted to 80 per cent of total expected tax collections.
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| In six years from 2005-06, the Government of India wrote off corporate income tax worth Rs.3,74,937 crore — more than twice the 2G fraud — in successive Union budgets. The figure has grown every single year for which data are available. Corporate income tax written off in 2005-06 was Rs.34,618 crore. In the current budget, it is Rs.88,263 crore — an increase of 155 per cent. That is, the nation presently writes off over Rs.240 crore a day on average in corporate income tax. Oddly, that is also the daily average of illicit fund flows from India to foreign banks, according to a report of the Washington-based think tank, Global Financial Integrity. |
The Rs.88,263 crore covers only corporate income tax write-offs. The figure does not include revenue foregone from higher exemption limits for wider sections of the public.
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| Pranab Mukherjee's latest budget, while writing off this gigantic sum for corporates, slashes thousands of crores from agriculture. As R. Ramakumar of the Tata Institute of Social Sciences (TISS) points out, the revenue expenditure on that sector “is to fall in absolute terms by Rs.5,568 crore. Within agriculture, the largest fall is to be in crop husbandry, with an absolute cut of Rs.4,477 crore.” Which probably signals the death of extension services, amongst other things, in the sector. In fact, “within economic services, the largest cuts are to be in Agriculture and Allied Services.” |
Revenue foregone on account of excise duty in this budget: Rs.1,98,291 crore. Clearly more than the highest estimate of the 2G scam losses. (The preceding year: Rs.1,69,121 crore).
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It is the largest conceivable transfer of wealth and resources to the wealthy and the corporate world that the media never look at. Oddly, the budget itself recognises how regressive this trend is. Last year's budget noted: “The amount of revenue foregone continues to increase year after year. As a percentage of aggregate tax collection, revenue foregone remains high and shows an increasing trend as far as corporate income tax is considered for the financial year 2008-09. In case of indirect taxes, the trend shows a significant increase for the financial years 2009-10 due to a reduction in customs and excise duties. Therefore, to reverse this trend, an expansion in the tax base is called for.” P. Sainath, The Hindu 7Mar 11.
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Bigger firms get bigger sops
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| Bigger the corporate, the lesser you pay in terms of tax as more exemptions are available to you, the Comptroller and Auditor General (CAG) has found. As against the statutory 33.9 per cent, 179 top companies with profit before tax (PBT) of Rs 500 crore and above paid an effective tax rate of 22.1 per cent in 2008-09. On the other hand, the effective rate for the companies up to PBT of only Rs 1 crore was more at 25.5 per cent. “This shows that tax concessions are being availed of mainly by large companies,” the CAG said in its latest report. The tax exemptions themselves have increased by 150 per cent to Rs 1.20 lakh crore from Rs 48,168 crore in 2005-06, it said. Over Rs 3 lakh crore in direct taxes, which is more than the annual corporate tax collection, is locked up in litigation at various levels. While Rs 2.2 lakh crore of revenue was locked up in appeal cases with the commissioner of Income-Tax (appeals) in 2009-10, the amount involved in litigation at the higher levels was Rs 91,087 crore, said the latest CAG report. “The amount locked up in appeal cases with CIT (A) was Rs 2.2 lakh crore in 2009-10”, said the report of CAG. The report added that Rs 2.2 lakh crore locked up in appeals with CIT (appeal) is equivalent to 66.9 per cent of the revised revenue deficit of the government of India. The total amount locked up in such cases was about Rs 3.1 lakh crore, which was more than corporate tax collection of Rs 2.4 lakh crore and about two-and-half times the income tax realisation of Rs 1.3 lakh crore in 2009-10. Each CIT (appeal) is required to dispose a minimum of 60 appeals per month and a total of 720 appeals annually. “Thus 1.1 lakh appeals could have been disposed on the basis of the working strength of 151 CIT (appeal),” the CAG report said. During 2009-10, the CIT (appeal) was required to dispose 2,60,700 cases. Of this, only 0.8 lakh (30.6 per cent) were disposed. D C 220311 |
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| The nominal corporate tax rate in India has been 33.2 per cent. A study of returns filed by 4.27 lakh companies by the end of December 2010 shows that the effective tax rate was only 23.53 per cent. Here also, it is the smaller company that gets affected. |
Companies with profits up to Rs 1 crore end up with an effective tax rates of 25.52 per cent. Companies with profits of over Rs 500 crore pay 22.05 per cent.
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Tax arrears in dispute Rs.1.60 lakh crore
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The government today said over Rs 1.60 lakh crore has been locked up in disputes between the income tax department and taxpayers as on January, 2011. Mar 15 (PTI)
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FCI Foodgrains loss due to damage Rs485 crore
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FCI, a nodal agency for procurement and distribution of foodgrains, is estimated to have lost Rs 484.76 crore in 2010-11 against Rs 437.87 crore in the previous year due to damage to foodgrains and storage , the Minister said in a written reply to the Lok Sabha . BL 010311
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*The nation's Feb. 1 wheat stocks were at 19.4 million tonnes, substantially higher than a target of 8.2 million tonnes, while rice inventory rose to 27.8 million tonnes against a target of 11.8 million tonnes, according to government sources.ET 230211
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*The country's food subsidy bill is expected to jump by 27 per cent to Rs 74,231 crore in the 2010-11 fiscal, the Lok Sabha was told today.
Last year, the government's food subsidy bill stood at Rs 58,242.45 crore.ET 220211
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| Agri Budget Proposals-A megre increase of 2.6%
in plan outlay |
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A megre 2.6 per cent increase in Plan outlay, programmes to improve production of palm oil, vegetables, millets, pulses, fodder and tax concessions on cold chains and storage equipment are some measures announced in the Budget as the government’s response to address the supply-side constraints contributing to higher food inflation.
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The minister announced schemes to enhance production of critical food items and also proposed to incentivise farmers who repaid loans on time, by giving an additional interest subvention of one percentage point. Thus, bringing the effective interest on crop loan for such farmers to four per cent.
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Banks have been asked to step up direct lending to small and marginal farmers to meet the enhanced farm credit flow target of Rs 475,000 crore for 2011-2012, about Rs 100,000 crore more from last year. The capital base of the National Bank for Agriculture and Rural Development is to be strengthened, by infusing Rs 3,000 crore to enable it to refinance short-term crop loans of cooperative credit institutions and regional rural banks at concessional rates.
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The central plan outlay for agriculture and allied sectors has been stepped up to Rs 14,744 crore in 2011-2012 from the revised budget estimate of Rs 14,362 crore in 2010-2011. The Plan outlay for irrigation and flood control has been increased by 36.8 per cent to Rs 565 crore from Rs 413 crore. The outlay for the ministry of agriculture has, however, been cut by 2.75 per cent to Rs 13,662 crore in 2011-2012, from the 2010-2011 revised estimate of Rs 14,040 crore.
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To further encourage states to allocate more funds for agriculture over and above their baseline expenditure on farming, an additional sum of Rs 1,105 crore has been proposed for the Rashtriya Krishi Vikas Yojana. This includes Rs 300 crore for promoting pulses production in 60,000 villages, another Rs 300 crore to bring 60,000 hectares under oil palm cultivation and Rs 400 crore for continuing with an initiative to usher a green revolution in eastern Indian states.
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Additionally, the Budget also proposed Rs 300 crore for enhancing production of millet in 1,000 compact blocks in arid and semi-arid regions. And, an equal amount for launching a national mission for protein supplements, to increase production of fish, eggs and chicken and for improving production of milk.
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To bring down the wide gap between farm gate and retail prices, accentuated by lack of storage infrastructure, it is proposed to extend the viability gap funding facility to capital investment in creation of modern storage capacity. Cold chains and post-harvest storage have been given the status of an infrastructure sub-sector.
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Fertiliser companies will get the benefit of investment-linked deductions as availed by other sectors. BS Reporter / March 1, 2011 |
| Poor progress since independance in railway route network |
| *The route network of Indian Railways has expanded slowly in the past, averaging an annual 180 km since 1947. The Railways had inherited 53,996 km of rail network, which was built during the British rule. But since independence, the Railways has managed to expand it by only 10,419 km. ET 210211 |
| CAG highlights net worth erosion in 68 PSUs @Rs.73,000 crore |
| In the financial reporting by central public sector undertakings 2009-10, tabled in Parliament by the Union Finance Minister, Mr Pranab Mukherjee, the CAG said that as a result of complete erosion of net worth of 68 PSUs, aggregate net worth of these companies had become negative to the extent of Rs 72,798 crore as on March 31, 2010. |
| The report also referred to the fact that though 189 PSUs earned profit, only 118 PSUs declared dividend for 2009-10, amounting to Rs 33,804 crore. Out of this, Rs 23,169 crore was paid/payable to the Government. |
| The dividend paid to the Government signified 13.39 per cent return on the total investment by the Government of India, that is, Rs 1,73,057 crore in all Government companies and corporations. |
| India ninth-most corrupt country: Survey |
| About 54% Indians paid a bribe in the past year, according to a global survey by Transparency International (TI). |
| Indians perceived political parties to be the most corrupt, ranking them 4.2 on a scale of one to five. Political parties are followed by Police (4.1), Parliament/legislature (4) and civil servants (3.5). Private sector, NGOs and judiciary are all seen to be similarly corrupt (3.1), with the media enjoying a marginally better rating at 3. |
| * "Power, the old saying goes, corrupts. It corrodes principle and beguiles politicians into placing their interests above the voters." — From an article by Steve Huntley in the Chicago Sun-Times, November 2, 2010 |
| *Anil Ambani multistory house at Mumbai costs a whopping sum of Rs 4,500 crore. 6 Dec, 2010, 07.35AM IST, T K Arun, ET Bureau |
| KRSR/AND /1101 |
