File photo of PM Narendra Modi | PTI
File photo of PM Narendra Modi | PTI
Text Size:

New Delhi: The Modi government’s revenue collection from direct taxes is set to be well short of the target for 2018-19 despite an impressive expansion of the tax base.

As of 23 March, the net direct tax collection stood at Rs 10.21 lakh crore against a revised target of Rs 12 lakh crore, tax sources told ThePrint.

The target for direct tax collection was revised upwards from Rs 11.5 lakh crore on 1 February when railways and coal minister Piyush Goyal presented the interim budget in the absence of finance minister Arun Jaitley.

The revision came on the back of increased collections in the first three quarters of the financial year.

“The finance ministry had earlier estimated direct tax collections to exceed the target by a reasonable margin and therefore the target was reset. Collections were also buoyant till January,” said an independent analyst who did not want to be identified.

However, with the government falling short of the revenue target, several tax officials have been transferred due to poor performance, said a senior finance ministry official who spoke on the condition of anonymity.

In the budget documents, Goyal had pointed out that number of returns filed until January increased to 6.85 crore from 3.79 crore — an 80 per cent growth in tax base.

“For making the life of our direct tax-payers easy, we reduced tax rates, more for the common man and middle class, and made the interface with the tax department much simpler and largely faceless,” the minister had said in his speech.

“Due to this, the tax collections increased significantly from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore this year.”


Also read: Congress might scrap GST slab system for single tax if voted to power


Shortfall

“This is going to dent the government’s overall macro economic projections as it was expecting direct taxes collection to surpass the target and even offset some other shortfalls. Now it seems unlikely,” said the analyst.

In the budget documents, the Modi government had revised the goods and services tax (GST) collection target downwards to Rs 6.43 lakh crore from Rs 7.43 lakh crore for the current fiscal.

“Earlier the problem was with GST tax collection figures. Now it seems that even direct tax mop up may well be short of the target, not just the revised one but also the original number of Rs 11.5 lakh crore,” the analyst added.

Goyal had also projected a 15 per cent growth in direct tax revenue at Rs 13.80 lakh crore for 2019-20.


Also read: Modi govt met disinvestment target only because one public sector company bought another


Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

2 Comments Share Your Views

2 COMMENTS

  1. Tax collection was bound to fell ‘ the slowdown ‘ jobless youth ‘ hard hit smes after demonitization is the reason behind it.

  2. Do the tax officials not visit showrooms filling up with tractors, two wheelers, cars, shops and restaurants where footfalls have fallen …

LEAVE A REPLY

Please enter your comment!
Please enter your name here