Sunday 17 July 2016

India ka report card

We all demand to know the use of every rupee we pay as tax.
We all demand a transparent government.
Just talking without the knowledge of facts is irrelevant.
So, let us have a look at the 'Central Government ka Pai Pai ka Hisab' in a brief way.

We have paid Rs. 19,57,440.32 crores by way of taxes and non-taxes to the central government for the FY 2015-16.

[All numbers below are approximate and out of Total Revenue of Rs. 19,57,440.32 crores]

What comprises the CG's Total Revenue:
a. Income tax by corporates: 23.14%
b. Income tax by non-corporates: 14.90%
c. Securities Transaction tax: 0.38%
d. Custom duties: 10.70%
e. Excise duties: 14.48%
f. Service tax: 10.73%
g. Other Commodity Taxes: 0.05%
i. Taxes of Union Territories without legislature: 0.20%
I. Gross tax revenue [sum of a to i]: 74.58%
II. Gross non-tax revenue (i.e. receipts of interest, dividends, profits, fiscal services, economic services, defence services, social & community services, grants-in-aid & contributions and other general services): 25.42%

The disbursements of the Total Revenue:
Organs of State (i.e. Parliament, Ministers, Audit, Justice, Elections, etc.) : 0.40%
Tax Collection Services: 0.54%
Other Fiscal Services: 0.01%
Administrative Services: 3.32%
Pensions and
Miscellaneous General
Services: 5.68%
Defence Services: 7.66%
Social Services (i.e. Education, Art & Culture, Medical & Public Health, Family Welfare, Housing, Water Supply and Sanitation, Labour and Employment, Social Security, Relief on account of Natural Calamities, etc.): 4.30%
Economic Services (i.e. Agriculture & allied activities, Rural Employment, Special Area Programmes, Irrigation and Food Control, Energy, Industry & Minerals, Transport, Communications, Science, Technology & Development, Tourism, Foreign trade promotion, Civil Supplies, General Economic Services, etc.): 30.22%
Interest Payment and
Servicing of Debt: 23.37%
Grants-in-aid & contribution: 15.71%
Disbursements to Union Territories without legislature: 0.42%
States' Share: 25.86%
Excess of disbursements over revenue (i.e. revenue deficit): -17.49%

Major points to be noted:
1. A fair amount of total revenue i.e. 30.22% goes into the economic development of the country.
2. Grants-in-aid & contribution accounts for 15.71% of the total revenue but how much reaches the needy is still a question of fact.
3. 4.30% is towards social services which seems still low to correct the social picture of India.
4. Pensions and Miscellaneous General
Services accounts for 5.68%. A good proportion goes to the alive but leakages exist in the uncollected accounts and dead accounts (i.e. money taken out by babus, agents, scamsters, etc. in the name of ill/dead as alive)
5. 25.86% goes to the States i.e. 1/4th of the pie of the CG which I presume that it somewhat goes towards correcting the states' deficit leaving the CG in deficit.


The below analysis is restricted to the Cental Government's performance to the Consolidated Fund of India on revenue account.
For the below analysis for the FY 2015-16, revised figures of FY 2015-16 from the published 'Annual Financial Statement of Central Government for FY 2016-17' is taken into consideration and is assumed to be fair and complete.

The analysis and views are personal.

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