‘Money makes the world go mad’ and when there is money there is economy involved too. In a country like India, where the income disparity is huge, the question of economy and all the elements around it become even more important. The budget 2018 has just been announced and while we all would be busy trying to check whether the changes would be beneficial to us in any way, there are some other unknown and new facts which we might not be aware of either.
Take a look at them:
1. Increase in the number of indirect (as well as direct) taxpayers
There has been a 50 percent increase in unique indirect taxpayers post GST implementation. Besides this, there has been an addition of approximately 1.8 million individual tax filers since November, 2016.
2. The difference between (formal) agricultural and non-agricultural payroll is much greater than believed
The difference exists at more than 30 percent when formality is defined in terms of social security provision (EPFO, ESIC) whereas when the same is defined on the basis of being in the GST net the difference goes over 50 percent.
3. There is positive correlation between States’ prosperity and their international and inter-state trade
States with active international and interstate export were noted to be richer in comparison. However, the correlation between prosperity and international trade is stronger.
4. The firm export structure of India is significantly more democratic than that in other large countries
From the exporting companies, the share of large firms in India is smaller than that of their counterparts in other countries. Top 1 per cent of Indian firms account for only 38 per cent of exports, unlike in Brazil where it accounts for 72 per cent and in Germany where it is 68 per cent.
5. The exports of readymade garments have been boosted by clothing incentive package
The ROSL or the rebate of state levies has improved exports of readymade garments (man-made fibers) by around 16 per cent.
6. Till they have not conceived the desired number of sons, Indian parents (still) continue to have children
Despite changing times, the desire of having a male child remains unchanged. This has given rise to sex selective abortion and differential survival, leading to skewed sex ratios at birth and beyond and even an estimated of 63 million “missing” women.
7. Considerable avoidable litigation in tax arena which if government action taken, could be reduced
The tax department’s petition rate is high, despite its success rate in litigation being low and at a constantly declining rate (which is below 30 per cent)
8. Raising investments is more important than raising savings for re-igniting growth
The Survey shows that growth in savings doesn’t bring economic growth but the growth in investments does.
9. Indian states and local governments have managed to collect significantly lower direct taxes than those of their counterparts in other federal countries
States and local bodies in India have collected lesser direct taxes than in other countries.
10. Agricultural yield is being adversely affected by extreme weather conditions
The survey cites extreme temperature increases and deficiency in rainfall as reasons for the changes in agricultural yields. It also shows that the effect of this has been twice as large in un-irrigated areas as in irrigated ones as per the analysis.
Here’s hoping the positives continue and the negatives be worked upon by both the government as well as individual citizens.