E-Paper
‘Robust GST collection trend will continue’: Revenue Secretary Tarun Bajaj
Economic affairs secretary Tarun Bajaj is sanguine about a robust economic growth in 2021-22, and said in an interview that the robust tax collection indicates the worst is over.
Economic affairs secretary Tarun Bajaj, who also heads the revenue department, is responsible for the execution of the government’s efforts to stimulate the economy and boost tax revenue. The Indian Institute of Management (IIM) graduate is sanguine about a robust economic growth in 2021-22, and said in an interview that the robust tax collection indicates the worst is over. Excerpts:
1 The GST collections have been strong for six months. Is this because of a pent-up demand after the lockdown was lifted or will the trend continue?
Pent-up demand would have ended after the festive season of Diwali. This continuous robust collection trend for the last six months is because of genuine demand and an improvement in collection efficiency. I’m sure this trend will continue. Earlier, when we crossed ₹1 lakh crore, we celebrated. Now, for the last six months, collections are much above ₹1 lakh crore each month and this month too it’s an all time high record ( ₹1.24 lakh crore).
2 What are the reasons for this?
Two reasons. One, we have simplified the GST compliance process further, and two, the use of technology. This has brought more people into the tax net. The technology was used to catch unscrupulous elements without any overreach... we had evidence-based information and so nabbed them through targeted action and that too without any resistance because they too knew that they were involved in tax evasion and had no escape due the (use of) technology and data analytics. (The) GST (regime) is progressing well and I shall acknowledge the very good work done by Dr Pandey [predecessor and former finance secretary Dr Ajay Bhushan Pandey].
3 Some tax professionals say that the GST administration has created an atmosphere of fear.
This is because we have caught more than a dozen of them, but action was taken based on credible evidence that they were involved in tax evasion.
4 What is the current position in direct tax collection?
Direct tax revenue collection [in 2020-21] is very good. We will collect more than the RE [revised estimate in Union Budget 2021-22]. The collection in February and March was good. There has been an improvement in corporate tax and personal income tax collections. Figures are coming in still, but we should be crossing the RE figure of ₹9.05 lakh crore. Not only will we exceed that but we have also given more refunds. Last year, in refunds, we gave ₹1.86 lakh crore; this time we have given refunds of at least ₹2.62 lakh crore. This shows the economy is doing well.
5 Will the robust collections help the cause of the fiscal deficit?
Yes, fiscal deficit [which is 9.5% of GDP] should come down.
6. It was officially estimated that GDP would contract by 8% in 2020-21. As the fiscal year ends, what is your assessment of GDP for 2020-21, and outlook for 2021-22?
In 2020-21, the contraction could be somewhere around 7 to 8%. Due to subsidies, there is a huge difference between GVA [gross value added] and GDP [gross domestic product]. Normally, the difference between GVA and GDP is not so much. But it is getting more pronounced because our subsidy amount has gone up. The subsidy amount has gone up because we brought the legacy loans of FCI [Food Corporation of India] into the Budget. Although it is a good step, because of it, the GDP figure goes down compared to GVA figure.
It was said that while contraction in GVA is 6.5%, contraction in GDP is 8%. So, keeping that in mind, I think, this [financial] year it [GDP] could be 7-8%. Next year [2021-22], we will have good growth. I don’t want to say what my calculation is, but the Union Budget has been prepared assuming 14.4% nominal GDP growth. Our Chief Economic Adviser has said 11% [real GDP], IMF [International Monetary Fund] has said 11.5%. So, next year, there will be a good growth.
7 Is there any threat to the economy because of recent spike in Covid-19 cases?
There will be different approach to handle these cases this time. Last time, we tried to contain the spread of the pandemic through lockdown. This time we will handle it with the vaccine. So, to that extent the impact on the economy will be minimal. You have seen that there are 50,000-60,000 cases daily, but we are not resorting to lockdowns, nor do we intend to do that. It is because our health infrastructure has improved and the vaccine has come.
8. What is the possibility of RBI reducing interest rates to boost investment?
RBI [Reserve Bank of India] is holding its MPC [monetary Policy Committee] this month, in April. It will take a decision... government has no role in it.
