Record Tax Collections Signify Economic Recovery, To Boost Growth: Government

Increase in tax collection is a sign of economic recovery and growth

India has recorded a record revenue collection of Rs 27.07 lakh crore in 2021-22, which is about Rs 5 lakh crore more than the budgeted estimate of Union Budget 2021-22.

The budget estimate for the Union Budget 2021-22 was Rs 22.17 lakh crore. This shows a growth of 34 per cent as compared to last year’s revenue collection of Rs 20.27 lakh crore.

In addition, there has been an increase of 49 per cent in direct taxes and 20 per cent in indirect taxes as per official estimates.

What does all this represent? According to the government, the increase in tax collection indicates a rebound in the economy in the wake of the coronavirus pandemic and is driven by the spread of COVID vaccination and growth in commercial and manufacturing activities.

This is all the more important as the Union Budget 2021-22 was presented on February 1, 2021, when the economy was recovering from the first wave of the coronavirus pandemic and the COVID vaccine had just arrived.

Growth in tax collection despite second wave

Hence there has been a huge jump in revenue collection, especially as the country was badly hit by the second wave of the pandemic as the delta version resulted in lakhs of deaths across the country between April and June 2021, which was announced by the government as a signal. as being described. economic recovery.

Official sources say the increased revenue collection has pushed up the country’s tax-GDP ratio to 11.7 per cent for 2021-22.

Good days are ahead

The government has said that the introduction of the vaccination program in January 2021 and the increase in revenue collection have put the economy on the path of recovery.

Tax collections have boosted GDP growth and the Finance Ministry has said that the tax buoyancy (which
is a measure of the increase in tax revenue compared to the growth of GDP) is very high
A healthy figure of 1.9 with 2.8 for direct taxes and 1.1 for indirect taxes.

The ratio of direct and indirect taxes went back from 0.9 in 2020-21 to 1.1 in 2021-22.

Official sources said an increase in domestic manufacturing activities in the coming years would also boost tax collections, thereby creating employment opportunities.

Source

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