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Budget 2020: Modi govt's tax revenue estimate falls for second time

Budget 2020: The net tax revenues in 2018-19 were 13.2 lakh crore and the figure was revised upwards by 14.4 per cent to Rs 15 lakh crore for the current fiscal against the budget estimates of Rs 16.5 lakh crore

twitter-logo Niti Kiran   New Delhi     Last Updated: February 1, 2020  | 18:11 IST
Budget 2020: Modi govt's tax revenue estimate falls for second time
Budget 2020: The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year

The government has pegged the net tax revenue for the fiscal year 2021 at Rs 16.4 lakh crore, marginally lower than the budgeted estimates of nearly Rs 16.5 lakh crore in FY20. This was the second instance of contraction, albeit lower, in the budgeted estimates of net tax revenues under the Modi government since the year 2014. It declined around 6 per cent to Rs 9,19,814 crore in the first full year budget presented by Narendra Modi-led NDA in 2015-16. The trend may not be very unusual because when Manmohan Singh-led UPA came back to power in 2009, the budget estimates of the net tax revenues went down by 7 per cent to Rs 4.7 lakh crore in 2009-10 compared to Rs 5.1 lakh crore in the previous year. The historical data reveals that there were only four instances of such declines in over three decades.

  

The net tax revenues in the year 2018-19 were 13.2 lakh crore and the figure was revised upwards by 14.4 per cent to Rs 15 lakh crore for the current fiscal against the budget estimates of Rs 16.5 lakh crore. Further, the budgeted estimates at Rs 16.4 lakh crore for the next fiscal translated into an increase of around 9 per cent from the revised estimates of FY20. 

Also Read: Union Budget 2020: Here's how India Inc reacted to Nirmala Sitharaman's speech

In Union Budget 2020, Finance Minister Nirmala Sitharaman announced a slew of measures to boost consumption and revive growth, including change in personal income tax rates.

"Recently, government has undertaken very significant tax reforms for boosting investments. However, expected tax buoyancy will take time. In continuation of the reform measures already taken so far, the tax proposals in this budget will introduce further reforms to stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations," she said.

Also Read: Budget 2020: Optional income tax regime will kill tax-based investment

The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year.

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