In the first eight months of the year, India’s fiscal deficit reached 112 percent of the target, largely because of a shortfall in reduced dividends from government companies, the survey said, noting higher-than-estimated revenue from asset sales would partially offset this.
He pointed out that not only did India improved its position in ease of doing business ranking but its sovereign rating too went up after 14 years. The survey revealed that there was a 50-percent increase in the number of indirect taxpayers since the implementation of GST. Large increase in voluntary registrations under GST, especially of small enterprises has led to greater formalisation of the economy.
“The GST has increased the number of unique indirect taxpayers by more than 50 per cent- a substantial 3.4 million”, it said, adding GST embodies and heralds a radical adjustment and enlargement in the understanding of the Indian economy.
The need of the hour is to fill the infrastructure investment gap with financing from private investment, institutions dedicated to infrastructure financing like National Infrastructure Investment Bank and also global institutions like Asian Infrastructure Investment Bank and New Development Bank which are focusing more on sustainable development projects and infrastructure projects.
Tax Department’s low success rate in disputes: The survey said that the tax authorities’ success rate in tax dispute is below 30 per cent. About 66 percent of pending cases accounted for only 1.8 percent of value at stake.
There is substantial avoidable litigation in the tax arena which government action could reduce. This was made possible due to good agricultural production coupled with regular price monitoring by the Union government.
The survey clearly points out raising investment is more important than raising saving to reignite growth.
The private investment is poised for a rebound. The survey, an annual report the health of the economy, was released ahead of the government’s budget statement, due to be presented by Finance Minister Arun Jaitley on Thursday. After listing the unfinished work (and there are many), the Survey seems to prepare the grounds for failure by praying that the world economy maintains its growth momentum and oil prices do not persist at current levels. ROSL increased export incentives by between 2.8 percent to 3.9 percent. The latest International Labour Organisation (ILO) data shows the number of jobless is expected to increase to 18.6 million in 2018, against 18.3 million in 2017. While the Insolvency resolution mechanism has begun in the right earnest, a big vigil needs to be kept and the banks must be given additional capital at the earliest. The major reduction in investment rate occurred in 2013-14, although it declined in 2015-16 too.
Suvodeep Rakshit of Kotak Institutional Equities said GDP growth might be at the lower end of the (7-7.5 pct) range, but broadly the estimates are in line with expectations.
Budget proposals are a closely guarded secret, but a finance ministry official with direct knowledge of the discussions said: “The government’s top priority is to create jobs and boost growth”.