{"id":144684,"date":"2021-11-02T20:25:34","date_gmt":"2021-11-02T14:55:34","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=144684"},"modified":"2021-11-02T20:25:34","modified_gmt":"2021-11-02T14:55:34","slug":"improved-finances-gives-centre-leeway-to-slash-fuel-excise-duties-but-a-renewed-spending-spree-is-avoidable","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/improved-finances-gives-centre-leeway-to-slash-fuel-excise-duties-but-a-renewed-spending-spree-is-avoidable\/","title":{"rendered":"Improved finances gives Centre leeway to slash fuel excise duties, but a renewed spending spree is avoidable"},"content":{"rendered":"\n

Synopsis: <\/strong>Reasons for the increase in Centre\u2019s gross tax revenues during April-September 2021.<\/p>\n

Introduction<\/strong><\/h5>\n

The Centre\u2019s gross tax revenues have grown 64.2% year-on-year during April-September. This has resulted in a reduced fiscal deficit for the first half of 2021-22 that is, just 35% of the budget estimate for the whole year.<\/p>\n

According to the Swiss investment bank Credit Suisse, this is the lowest since 2007-08 and way below the 10-year-average of 74%.<\/p>\n

What are the reasons?<\/strong><\/h5>\n

There are two probable reasons for the above,<\/p>\n

One,<\/em> due to the increasing formalisation of the economy<\/strong>. Demonetisation, GST (goods and services tax) and the lockdown have led to organised sector firms gaining market share from informal enterprises.<\/p>\n

Two,<\/em> improved tax compliance<\/strong>. For instance, e-way bills and other systems now for tracking transactions and plugging leakages, has translated into overall improved tax compliance.<\/p>\n

Three,<\/em> increased corporation and income tax collections. For example,<\/strong> corporation and income tax collections during April-September 2021 was higher than their corresponding respective levels for April-September 2019.<\/p>\n

Four,<\/em> increased fiscal resource through petrol and diesel taxes<\/strong>. The Centre\u2019s revenues from excise duties (mainly on fuels), have grown 79% over the same period two years ago.<\/p>\n

What should be the way forward?<\/strong><\/h5>\n

First,<\/strong><\/em> the Centre should start consolidating its fiscal gains. That is important in the current scenario where yields on its 10-year bonds have been increasing. With most central banks signalling their intent to suck out excess liquidity in response to inflation concerns, the pressure on yields may only go up.<\/p>\n

Second,<\/strong> <\/em>Improved finances gives the Centre enough space to slash fuel excise duties necessary to curb inflation expectations.<\/p>\n","protected":false},"excerpt":{"rendered":"

Synopsis: Reasons for the increase in Centre\u2019s gross tax revenues during April-September 2021. Introduction The Centre\u2019s gross tax revenues have grown 64.2% year-on-year during April-September. This has resulted in a reduced fiscal deficit for the first half of 2021-22 that is, just 35% of the budget estimate for the whole year. According to the Swiss… Continue reading Improved finances gives Centre leeway to slash fuel excise duties, but a renewed spending spree is avoidable<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216],"class_list":["post-144684","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704949808},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/144684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=144684"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/144684\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=144684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=144684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=144684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}