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Tax Collection Woes of the Government

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Budget 2017-18

[vc_row][vc_column][vc_column_text]By Parsa Venkateshwar Rao Jr

Finance Minister Arun Jaitley in his 2017-18 Budget speech in the Lok Sabha on Wednesday explained the rationale of demonetisation and the push towards digital transactions by citing the tax evasion figures of those who do not file returns at all and those who under-quote their profits.

He said of the 4.2 crore who were employed in the organised sector, only 1.74 crore files tax returns, and out of the 5.6 crore individual enterprises and firms doing small business, only 1.81 crore filed returns. And among the 13.94 lakh companies which are registered till March 31, 2014, only 5.97 lakh companies filed returns for 2016-17. And of the 5.97 lakh companies which have filed returns, 2.76 lakh companies have shown losses or zero income. Among those which showed profit, 2.85 lakh companies have shown less than Rs 1 crore in profit, 28,667 have shown profits between Rs 1 crore and Rs 10 crore, and only 7781 companies showed more than Rs 10 crore in profit.

Of the 3.7 crore individuals who have filed tax returns in 2015-16, 99 lakh showed the exemption limit of Rs 2.5 lakh per annum, 1.95 crore showed an annual income between Rs 2.5 lakh and Rs 5 lakh, 52 lakh showed income between Rs 5 lakh and Rs 10 lakh and only 24 lakh showed annual income more than Rs 10 lakh. And of the 76 lakh who showed income above Rs 5 lakh, 56 lakh were in the salaried class. Only 1.72 lakh showed income of more than Rs 50 lakh per annum.

Jaitley in his speech said, “We can contrast this with the fact that in the last five years, more than 1.25 crore cars have been sold, and the people who flew abroad, either for business or tourism, is 2 crore in the year 2015. From all these figures we can conclude that we are largely a tax non-compliant society.”

And he argues, “The predominance of cash in the economy makes it possible for the people to evade their taxes. When too many people evade taxes, the burden of their share falls on those who are honest and compliant.”

Then he referred to the preliminary analysis of data with regard to deposits in the Rs 1000 and Rs 500 denominations: “During the period November 8  to December 30 , 2016, deposits between Rs 2 lakh and Rs 80 lakh were made in 1.09 crore accounts with an average deposit size of Rs 5.03 lakh. Deposits of more Rs 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs 3.31 crores.”

He concluded: “This data mining will help us immensely in expanding the tax net as well as increasing the revenues, which was one of the objectives of demonetisation.”

Lead Picture: The Union Minister for Finance and Corporate Affairs, Arun Jaitley along with the Minister of State for Finance and Corporate Affairs, Arjun Ram Meghwal arrives at Parliament House to present the General Budget 2017-18, in New Delhi. Photo: PIB[/vc_column_text][/vc_column][/vc_row]

India News

Karnataka cabinet clears 15% internal reservation for Scheduled Castes, recruitment to begin soon

Karnataka approves internal reservation within SC quota, paving way for jobs

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The Karnataka cabinet, led by Chief Minister Siddaramaiah, has approved an internal reservation framework for Scheduled Castes (SCs) within the existing 15% quota, a move expected to address long-standing demands and restart stalled government recruitment.

The decision was taken during a special cabinet meeting and introduces a revised formula to distribute the quota among different SC sub-groups.

How the quota will be divided

Under the new structure, the 15% reservation for Scheduled Castes will be split into three categories:

  • 5.25% for “left-hand” SC communities
  • 5.25% for “right-hand” SC communities
  • 4.5% for other SC groups, including nomadic communities

The formula is based on proportional representation and aims to ensure equitable distribution of benefits among various sub-castes.

Recruitment to resume after long delay

The cabinet’s approval is expected to immediately unlock recruitment for thousands of government positions that had been on hold due to the reservation issue.

Officials indicated that recruitment notifications will now be issued, potentially opening up more than 50,000 vacancies across departments.

Long-pending demand addressed

The move comes after decades of demands from different SC communities seeking internal classification within the quota system. The government described the decision as a step toward social justice and balanced representation.

The issue had remained unresolved for years due to legal and administrative complexities, including concerns over exceeding the Supreme Court-mandated 50% reservation cap.

Political and social significance

The decision carries both administrative and political importance, as it addresses a sensitive issue affecting multiple communities within the Scheduled Castes. It also comes at a time when reservation policies continue to be a major subject of debate across states.

While the government has presented the move as a corrective step, it is likely to trigger reactions from various stakeholders, including opposition parties and community groups.

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India News

Amit Shah claims Mamata leaving, BJP coming after high turnout in Bengal polls

Amit Shah says high turnout in Bengal polls signals shift from Mamata Banerjee’s rule, predicts BJP surge.

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Union Home Minister Amit Shah on Friday expressed strong confidence in the Bharatiya Janata Party’s prospects in the ongoing West Bengal Assembly elections, asserting that the political mood in the state signals a shift away from Chief Minister Mamata Banerjee.

Speaking after the first phase of polling, Shah claimed that the high voter turnout indicates a desire for change, stating that “Mamata is leaving and BJP is coming.”

The first phase of elections recorded a notably high turnout across several constituencies, which Shah said reflects growing public support for the BJP and dissatisfaction with the current administration.

BJP predicts strong performance

The senior BJP leader went a step further, projecting a significant electoral gain for his party. He suggested that feedback from party workers and internal assessments indicate that the BJP could secure a large share of the seats contested in the first phase.

Shah linked the voter turnout to what he described as a broader shift in public sentiment, claiming that people in the state are moving from “fear to trust” and are ready for political change.

Intensifying political battle

The remarks come amid a high-pitched political contest between the BJP and the ruling Trinamool Congress, led by Mamata Banerjee. The ongoing election has seen sharp exchanges between leaders from both sides, with each camp projecting confidence in forming the next government.

Shah’s comments also follow recent statements by Banerjee targeting the BJP at the national level, highlighting the broader political stakes surrounding the Bengal elections.

As polling progresses in multiple phases, the results are expected to play a crucial role in shaping the political landscape of the state.

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India News

Kejriwal calls MPs for meeting, sources say he was unaware of developments

Arvind Kejriwal met AAP MPs at his residence, with sources suggesting he was unaware of developments that emerged ahead of the meeting.

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In a key political development, Arvind Kejriwal called a meeting of Aam Aadmi Party (AAP) MPs at his residence, with sources indicating that the party chief was unaware of what was about to unfold.

According to sources, the meeting was convened amid signs of unease within the party. However, those familiar with the developments said Kejriwal did not have prior knowledge of the concerns or positions that some MPs were expected to raise during the interaction.

The discussions come at a time when AAP is navigating internal challenges, with indications of differing views within sections of its parliamentary leadership. While details of the meeting have not been officially disclosed, sources suggested that the interaction carried an element of surprise for the party leadership.

There has been no official statement from the party regarding the outcome of the meeting. The situation remains fluid, and it is not yet clear what impact these developments may have on the party’s parliamentary strategy going forward.

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