NGOs- the National Alliance for People’s Movements (NAPM) and the People’s Budget Initiative (PBI)- have called for changes in the budgeting system of central and state governments that would ensure equitable allocations for all sections of the society.
They have said that there is a need of a progressive fiscal policy in the country and strong steps to increase the tax-gross domestic product (GDP) ratio.
Presently, India has the lowest taxGDP ratio at 16.4 (meaning that amount worth only 16.4% of GDP is collected as tax revenue by the government), when the ratio is 17.7 for even the lower middle income countries (LMIC) and average 28% for G-20 countries.
Members of the NGOs including Medha Patkar, Subrat Das, Soumya Dutta, Sachin Jain, Roshanlal Agarwal addressed a press conference on Tuesday and gave out recommendations and suggestions on basis on regional consultations held across country, the NGOs have said that the stress should be on imposing heavier taxes on the wealthy and making more budgetary allocations for the marginalised sections of society.
For this, they have said that if inheritance tax was imposed on the wealthiest people in the country - the 55 billionaires worth Rs 13,92,000 crore should be at the tax rate of 55% as in the USA, annual revenue of Rs 16,863 crore could be generated.
{{/usCountry}}For this, they have said that if inheritance tax was imposed on the wealthiest people in the country - the 55 billionaires worth Rs 13,92,000 crore should be at the tax rate of 55% as in the USA, annual revenue of Rs 16,863 crore could be generated.
{{/usCountry}}Similarly, if all the 8,200 ultra-high income group individuals worth Rs 47,25,999 crore were made to pay wealth tax even at 1% then Rs 47,250 crore could be generated every year.
Also, if the 44% individuals in high income group - who presently don’t pay income tax - were made to pay it, then Rs 87,282 crore could be generated - which is almost 1% of the GDP.
They further said that another important step should be reducing or totally withdrawing the tax exemptions to the corporates in the form of corporate income tax, custom duty and excise duty exemptions.
The magnitude of tax revenue foregone during 2011-12 budget due to exemptions/deductions/incentives in the central government tax systems is extimated at Rs 5,29,432 crore - about 6% of country’s GDP.