FINANCE MINISTRY

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Direct tax collection unrealistic without revision: Who is to be blamed?

The economy of the country is collapsing and it is unlikely that the government will be able to match the Direct Tax Collection even of any of the past three years’ tally. It is for sure going to remain lower than the past 3-4 year’s collection.

Director IT-Budget Mahesh Kumar has written to all principal chief commissioner of IT that the statistical growth rate for a region has been further moderated by averaging it out with the all-India targeted growth rate so as to narrow the gap between all-India growth and the target growth rate given to the region.

But in a changed scenario how tenable this tax recovery target will be that is a big question. The target set by the government in the budget for 2020-21 tax collection was Rs 13.19 lakh crore with almost one third from Mumbai only which is worst affected by COVID-19 halting every economic activity.

A senior IT official told Indianmandarins that CBDT should have revised the budget estimates as he feels meeting the budget target is unlikely and impossible. But now IT officials would be under immense pressure to go aggressive and target businessmen.

Another senior officer said that when there are already massive layoffs of employees, how would there be personal income tax collection? There will not be any salary revision in any sector with massive salary cuts. All these things should have been factored into by the CBDT but as per Pandey’s instruction, CBDT sent the letter with zone wise targets without realizing reality on the ground.

(By Rakesh Ranjan)

22 Apr 2020
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MP Secretariat silent in the hour of need

The State secretariat is virtually emptied in the wake of ongoing political crisis in MP and the coronavirus outbreak in the country. There seems to be no one in the secretariat to take well considered call on the critical issues confronting the state, at present. Ever since 22 MLAs owing allegiance to Jyotiraditya Scindia quit Congress, the State Secretariat has become deserted. As news came on Thursday night that the CM would address a press conference on Friday, the bureaucracy, well aware that the CM does not have numbers, was sure that conference was called to announce his resignation. The secretariat was therefore emptied on Friday morning. However, there was some activity on the fourth floor of Vallabh Bhavan-II, the chief secretary’s office.

 

Besides, officials of GAD remained busy till Thursday as the government continued to do transfers and make political appointments on boards and corporations, apart from health department making plans to check coronavirus. Besides, commercial taxes department for revenue collection and finance department which had to rework the state budget, all other major decisions came to stand still at the secretariat.


By: Neha Sharma

21 Mar 2020
direct-tax-collection-unrealistic-without-revision-who-is-to-be-blamed-

Direct tax collection unrealistic without revision: Who is to be blamed?

By Rakesh Ranjan 22 Apr 2020

The economy of the country is collapsing and it is unlikely that the government will be able to match the Direct Tax Collection even of any of the past three years’ tally. It is for sure going to remain lower than the past 3-4 year’s collection.

Director IT-Budget Mahesh Kumar has written to all principal chief commissioner of IT that the statistical growth rate for a region has been further moderated by averaging it out with the all-India targeted growth rate so as to narrow the gap between all-India growth and the target growth rate given to the region.

But in a changed scenario how tenable this tax recovery target will be that is a big question. The target set by the government in the budget for 2020-21 tax collection was Rs 13.19 lakh crore with almost one third from Mumbai only which is worst affected by COVID-19 halting every economic activity.

A senior IT official told Indianmandarins that CBDT should have revised the budget estimates as he feels meeting the budget target is unlikely and impossible. But now IT officials would be under immense pressure to go aggressive and target businessmen.

Another senior officer said that when there are already massive layoffs of employees, how would there be personal income tax collection? There will not be any salary revision in any sector with massive salary cuts. All these things should have been factored into by the CBDT but as per Pandey’s instruction, CBDT sent the letter with zone wise targets without realizing reality on the ground.

(By Rakesh Ranjan)

mp-secretariat-silent-in-the-hour-of-need-

MP Secretariat silent in the hour of need

By IndianMandarins 21 Mar 2020

The State secretariat is virtually emptied in the wake of ongoing political crisis in MP and the coronavirus outbreak in the country. There seems to be no one in the secretariat to take well considered call on the critical issues confronting the state, at present. Ever since 22 MLAs owing allegiance to Jyotiraditya Scindia quit Congress, the State Secretariat has become deserted. As news came on Thursday night that the CM would address a press conference on Friday, the bureaucracy, well aware that the CM does not have numbers, was sure that conference was called to announce his resignation. The secretariat was therefore emptied on Friday morning. However, there was some activity on the fourth floor of Vallabh Bhavan-II, the chief secretary’s office.

 

Besides, officials of GAD remained busy till Thursday as the government continued to do transfers and make political appointments on boards and corporations, apart from health department making plans to check coronavirus. Besides, commercial taxes department for revenue collection and finance department which had to rework the state budget, all other major decisions came to stand still at the secretariat.


By: Neha Sharma

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Swamy questions FM on excise duty hike on petrol

By IndianMandarins 16 Mar 2020

In his latest tweet, Subramanian Swamy has questioned the prudence of Union Finance Minister on raising excise duty on petrol and diesel, calling this an astonishing move. Though known for speaking his mind irrespective of party line, this tweet comes as a clear embarrassment to the government, already facing questions on GDP and overall economy.

By: Neha Sharma

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Govt writes to every department on austerity measures

By IndianMandarins 05 Feb 2020

In its move to bring down official and some other expenses further, the government has written to every department to take austerity measures. Every department has been asked to cut down unnecessary expenses including unproductive works with great expanses and such works that could be done with much less resources.

Sources said that some of the departments have already identified such splurge of money and is planning to corrective measures without compromising the work. Though the Modi government has always been talking about cutting costs but in view of slowing economy, this is in focus now.

Sources said that there are certain departments where splurge of government resources is very common and the government has noticed those waste of money. So the government is now not only very serious but very tough on this that the government order must be complied with utmost responsibility.

 

finmin-may-push-for-rs-25-30k-cr-interim-dividend-from-rbi

FinMin may push for Rs 25-30K cr interim dividend from RBI

By IndianMandarins 22 Jan 2020

Union finance ministry is expected to push for Rs 25,000-30,000 crore interim dividend from the RBI for the third time in a row. Reportedly with the interim dividend from the RBI, the govt wants to put a check to 3.3 percent fiscal deficit target slippage. Reportedly, the Finance Minister may take up the matter in a post-Budget.

The RBI paid a total Rs 38,000 crore as an interim dividend in the past. The government has a Budget estimate of Rs 90,000 crore dividend from RBI in FY20. The RBI follows July-June as FY and usually distributes dividend in August after annual accounts are finalised and interim dividends if any, they are given around February to the government.

For 2018-19, the RBI transferred a total of Rs 1.76 trillion to the government, including a one-time transfer of Rs 52,637 crore which was deemed as excess reserves and comprising Rs 1,23,414 crore of surplus for the year 2018-19. The government is fighting a six-year low growth, subdued demand, and consumption leading to projections of 5 percent growth.

fm-takes-on-board-suggestion-on-reducing-it-rate-cut

FM takes on board suggestion on reducing IT rate cut

By IndianMandarins 03 Dec 2019

There was a long pending demand for reducing cut in personal income tax, Finance minister Nirmala Sitharaman had taken on board the suggestion from lawmakers to reduce personal income tax rates and it would be considered for its merit, rather than to bring parity with the government’s decision to slash corporate income tax rates.
It is very different to compare developed countries and developing countries and emerging economies and then say they have income tax reduction and therefore you should give, Sitharaman said, adding that the government has periodically given relief to individual taxpayers and several exemptions have been offered.
A government panel on direct tax has suggested relief for tax payers and the finance minister had earlier said the government was examining the report. Experts have demanded a cut in personal income tax rates to boost demand and consumption, but the government has little headroom to slash rates, given concern over the fiscal deficit which the Centre has said will be kept at the targeted level of 3.3% of GDP.

over-rs-1-trillion-gst-collection:-a-sigh-of-relief-for-sitharaman

Over Rs 1 trillion GST collection: A sigh of relief for Sitharaman

By IndianMandarins 02 Dec 2019

In a situation when GST collection has become a parameter of economic health of the country, a seven-month high recovery in November crossing the Rs 1-trillion gives a sigh of relief to the government. However, this rise is attributed to festive season demand and anti-evasion measures by the government but it is still short of its target that is around Rs 1.18 trillion.

The GST mop-up grew by 6 per cent in November over the corresponding period last year to Rs 1.03 trillion, against Rs 95,380 billion in October. These figures are for October, collected in November.

Although the collection figures come as a breather for the government, it is lower than the expected collection rate needed to meet the steep target for 2019-20 (FY20). Being a festival month, GST collection on domestic transactions witnessed a 12 per cent growth — the highest during the year. GST collection on imports continued to see negative growth of (-)13 per cent, against (-)20 per cent in October.

This is the eighth time since GST inception in July 2017 that the monthly collection has crossed the Rs 1-trillion-mark. Also, the November 2019 collection is the third-highest monthly collection since the introduction of GST, next only to April 2019 and March 2019 collections.

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FinMin: A complete overhaul in next 5 months?

By IndianMandarins 25 Nov 2019

If some top sources are to believed all four departments under Union Ministry of Finance are set to get a fresh set of departmental heads in the next five months. The Department of Expenditure, presently under ad-hoc arrangement, became headless after G C Murmu (IAS:1985:GJ) was picked up as J&K Lieutenant Governor. Union Finance Secretary Rajiv Kumar (IAS:1984:JH), Secretary, DFS, is retiring in February next year followed by Economic Affairs Secretary Atanu Chakraborty (IAS:1985:GJ) scheduled to retire April next year. Though Revenue Secretary A B P Pandey (IAS:1985:MH) may remain on turf till February 2021 but with vital figures dipping steadily the power corridors are abuzz that Pandey may be shifted to some other key departments. If that be the case the Finance Ministry may see a fresh set of faces to steer the economy which would be key to take NaMo 2.0 to its 3.0 version.

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