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July 9, 2001
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Money > Business Headlines > Report July 9, 2001 |
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Tax-GDP ratio at 9.5%Santosh Tiwary The central statistical organisation's downward revision of GDP growth from 6 per cent to 5.2 per cent for 2000-01 has turned out to be a boon in disguise for the normally falling tax-GDP ratio. The tax-GDP ratio for the previous fiscal, which stood at 8.55 per cent (calculated at 6 per cent GDP growth) as per the figures released by the controller general of accounts, has now bounced back to touch 9.5 per cent, the highest in the last five years. Notwithstanding a huge shortfall in tax realisation of around Rs 105 billion from the revised estimate of Rs 1983.21 billion, the tax-GDP ratio also crossed the budget estimate target of 9.2 per cent, which pegged the revenue collections at Rs 2002.88 billion. According to CSO figures, the GDP at current prices stands at 19780.42 billion. Tax revenue as a percentage of GDP started deteriorating from 1997-98 onwards after recording 9.4 per cent in the previous two fiscal. It went down to 9.1 per cent in 1997-98, 8.2 per cent in 1998-99, and improved slightly to 8.8 per cent in 1999-2000. As per the controller general of accounts' figures released earlier, the tax-GDP ratio for 2000-01 stood below the previous year's level at 8.55 per cent. However, thanks to the CSO revision of GDP growth, it has reached a level, which has proved to be a blessing in disguise for the government. Sources, however, said that the recently released CSO figures were the quick estimates and the GDP growth may go up when the final figures come. The skewed tax-GDP ratio in 2000-01 is expected to be a feature in the current fiscal despite the continuance of poor revenue realisation in the first quarter as the economic slowdown is yet to show any signs of improvement, said sources. According to the budget estimates for 2001-02, tax to GDP ratio is targeted at 9.16 per cent. The advisory group on tax policy and tax administration for the Tenth Plan headed by Parthasarathi Shome, has projected tax-GDP ratio for the current fiscal and 2002-03 at 9.39 per cent and 9.69 per cent respectively. Powered by YOU MAY ALSO WANT TO READ:
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