Financial Daily from THE HINDU group of publications
Friday, Jul 09, 2004

News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Industry & Economy - Budget


3 key areas targeted for 24.6% revenue mop-up

Our Bureau

New Delhi , July 8

THE Finance Ministry is targeting a 24.6 per cent growth in the Centre's gross tax revenues during this fiscal, which, it says, can be achieved through a `marked improvement' in industrial production, `continued buoyancy' in the services sector and mopping up huge `recoverable' arrears in both direct and indirect taxes.

According to the Revenue Secretary, Ms Vineeta Rai, currently about Rs 15,000-crore of direct taxes are pending recovery not on account of any legal dispute before various courts, but due to "absence of certain administrative inabilities to pursue these cases".

In indirect taxes, there is a similar recoverable amount of Rs 3,000 crore, which is largely undisputed.

The Budget has proposed to initiate a special drive to recover these arrears, for which the Ministry will set up a core team. "We can easily realise at least Rs 8,000 crore from this exercise", Ms Rai said.

The other area that is being targeted is services, which is budgeted to realise Rs 14,000 crore in 2004-05, against last year's Rs 8,300 crore. Even while admitting that the target was "ambitious", revenue officials say that the increase in the service tax rate from 8 to 10 per cent alone would yield over Rs 1,000 crore. Moreover, 13 new services are being added this year, widening the tax base.

But, on the other hand, the decision to exempt people with taxable income of up to Rs 1 lakh will cost the exchequer about Rs 1,700 crore. This will, however, be more than offset by the imposition of the 2 per cent cess on all direct and indirect taxes. The cess can yield Rs 4,000-5,000 crore in a full year, which means roughly Rs 2,500 crore this fiscal.

As for the 0.15 per cent tax on the value of security transactions, Ms Rai said that it would apply to all shares, debt instruments, gilts and futures and options in individual shares and indices traded in recognised stock exchanges. The new tax will generate about Rs 7,000 crore for a whole year, which means roughly Rs 4,000 crore in the current fiscal.

On the whole, the Centre's gross tax collections in 2004-05 are budgeted to rise by 24.6 per cent to Rs 317,733 crore. In the process, the Centre hopes to restore the tax-GDP ratio to the 1990-91 level of 10.1 per cent.

The ratio has been falling steadily in the post-reforms period, though the trend has been reversed from 2003-04 (see Table).

lso, nearly 44 per cent of the revenues this year would be from direct taxes, against only 19 per cent in 1990-91.

More Stories on : Budget | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
More bank finance for stock brokers


`Budget is not inflationary' — Transaction tax no impediment to stock market activities
Chidambaram plays the popular tune — Tax breaks for farm sector and lower middle class
Thumbs down by markets
Service tax on transport intermediaries hailed
Adopting the Keynesian route
FDI push on telecom
Shipping industry says `ahoy!'
Mutual funds — Odds stacked against debt funds
Tonnage tax at last for a smooth sailing
Focus on rural housing; tax rebates to stay
Banking on industrial growth
IIG to beef up infrastructure
ONGC, GAIL to carry the can
A rural slant
Power on `line
Govt to facilitate crop diversification
A bitter pill, says pharma sector
Chaos after the wait
At your service, tax!
A progressive budget
Striking a balance
Spurring investments
Continuance of economic reforms
Catch My Point!
Mixed response from India Inc
Move to drop Cenvat may pep up yarn market
'Market pessimism to end soon'
Steps initiated to integrate stock, commodity markets
FDI in aviation capped at 49% — Buying of aircraft to attract tax
Toyota to set up R&D centre in India
0.15 per cent tax to be levied on securities transactions
SPV for Sethusamudram canal project
Insurance FDI limit raised to 49 pc
IDBI gets Rs 9,000 cr to turn zero NPA
In coalition company
Captains of industry give Budget proposals a cautious welcome
Shifting gears
Turnover tax may spook capital gains
RBI sees no Budget trigger for change in rate, inflation outlook
Views from the bottom of a coffee cup
Customs duty cut on metals: Major price impact unlikely
Coop sugar sector needs tax holiday
Water bodies renovation innovative
Transaction tax a dampener: FISE
Modest hike in Central Plan outlays in real terms
Nothing much to glow about
Smooth ride for tractors
Impact
No excise duty on dairy machinery
The jam in the Budget
Disinvestment, reborn
Disappointing delivery
Little to build on
Right thrust on crop diversification
Oil and gas — Slickly left alone
3 key areas targeted for 24.6% revenue mop-up
Industry divided on price drop
A taxing scenario for media
Personal finance: Thrust to direct equity investing
A cess to educate
`Back-to-basics' theme
A `neutral-to-negative' exercise: MFs
A mixed bag
Little more buoyant now
Prices static? Not for long
FDI limit hike has insurers smiling — Service tax on risk premium for life cover is a dampener
`More clarity on turnover tax needed'
Sewing up the competition
A lot to cheer about
Turnover tax seen as a blip
Rural sops to get FMCGs going
May impact trading volume: market players
`VAT by 2005, a step in right direction'
Your dream car to become dearer
A limited first step
Consolidation vital
Slip into khadi and morph into a geek
Hindujas interested in desalination project proposal
Budget fails to impress CETMA
`Bold decisions taken on foreign investments'
No impact on gold market; platinum prices may fall
THE THRUST AREAS
FIPB to fly with clipped wings
Cap for SSI loans raised to Rs 1 cr
A bitter-sweet pill for vegoil sector
Assurance to States on VAT compensation
Service tax hiked to 10 pc; list expanded
An effort to reflect mandate for change
New deal for farmers; more funds for States
Stress on moderation, stability in tax rates
Textiles woven in style
More services annexed at a higher rate
VAT full of promises
Watch out as the government shifts gears and piggybacks
No luck if you cross a `lakh'
Tax admin: Reforms kept in arrears
`No clear theme in the Budget' — Mr Yashwant Sinha, former Finance Minister



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line