New Delhi: If tax collections are an indication of economic health, this country is fit as a fiddle. A little over a week ago, we got news that direct tax collections were up 40% at Rs2,28,745 crore till 15 february this fiscal. And now, finance ministry officials are confident of breaking the Rs3,00,000-crore mark in direct tax mop ups.
And although excise duty collections are not so encouraging, the FM says he expects indirect taxes mop ups to better last years performance.
It is in this context that we bring you a view from the other side, as it were. It isn’t as if Prof Ahindra Chakraborty is the eternal pessimist. But the director general of Fortune Institute of International Business and member of the task force, MoU Committee, Government of India says, in very simple words, ”there will always be a shortage of funds”.
In a report exclusively available to livemint.com, Chakraborty has shared his views on how the government could and should tap short- and long-term resources.
In his report, Chakraborty has brought to the fore issues such as the magnitude of tax arrears and huge blockage of resources in the form of inventories and cash and bank balances by public sector enterprises, among others.
He has also made recommendations — such as bringing dividends and long-term capital gains on shares under the tax net — that will not find favour with many. But he has substantiated his arguments with hard statistics and their analyses.