Tax seizures grow faster than GDP
Is black money growing faster than the GDP? Has economic liberalisation including easier tax rates failed to curb tax evasion?business Updated: Mar 16, 2011 20:44 IST
Is black money growing faster than the GDP? Has economic liberalisation including easier tax rates failed to curb tax evasion?
A statistical comparison of the country's economic growth and the amount of money and valuables seized by income-tax authorities in their search operations would suggest so.
The compounded annual growth rate (CAGR) of seizures of unaccounted assets over the past 20 years stands at 7.5% whereas India's gross domestic product growth rate has averaged 6.5% over the same period.
In 1990-91, the department seized unaccounted assets worth Rs 227.9 crore by conducting 7,505 raids across India, while in 2009-10, through 3,454 raids, assets worth Rs 963.5 crore were seized.
"Simultaneously, with the growth in our economy, the quantum of black money and the tendency to evade taxes has gone up, despite India now having an efficient tax administration than 20 years back," a senior official of I-T (Investigation) said.
However, seizures have been uneven, and unlike the GDP, do not show a clearer pattern.
In the earlier part of the last decade, seized amounts were lower while it jumped over the past two years.
The department has detected Rs 16,000 crore of unaccounted income between 2009 and January 31, 2011.
In contrast to the value of assets seized that went up in two decades, the number of raids considerably declined.