India is on its way to becoming a 5 billion economy; surge in tax revenue shows rapid growth, govt says

New Delhi: India is making progress towards its goal of becoming a $5 trillion economy and massive increase in tax revenue is a testament to its growth journey despite the pandemic setback, the government announced on Thursday.

Tax revenue last fiscal year rose by a record 34% to Rs 27.07 lakh crore, prompting the Ministry of Finance to call the figures a “remarkable testimony to the rapid recovery” of the economy after successive waves of COVID-19.

“The central government’s emphasis on transforming India into a global economic powerhouse and the multitude of measures adopted as part of this commitment have been directly reflected in the GDP growth during the last years. This has translated into increased treasury revenue while keeping India on track to achieve a $5 trillion economy…,” the ministry said in a statement.

Prime Minister Narendra Modi has set the goal for his government to help India become a $5 trillion economy and a global economic powerhouse with all its economic policies geared towards this direction. India’s GDP is estimated to be around $3 trillion in 2021-22.

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The ministry said apart from a brief setback due to COVID-19, the government has kept nominal GDP growth above 10 percent in recent years. The GST, a simplified way of collecting indirect taxes, was a revolutionary step boosting India’s GDP.

“With a surge in capital expenditure in the Union budget of 2022-23, the coming years will see an increase in domestic manufacturing as well as job growth. These in turn will directly increase the tax contribution to the public treasury,” the ministry said.

Gross corporate tax in 2021-22 was Rs 8.6 lakh crore compared to Rs 6.5 lakh crore in the previous year.

This, the ministry said, shows that the new simplified tax regime with low rates and no exemptions has delivered on its promises, improving the ease of doing business for the corporate sector, boosting India’s economy and increasing India’s tax revenue. government.

Over the past financial year, collection of direct taxes increased by a record 49% to Rs 14.10 lakh crore, while indirect taxes recorded a growth of 20% to reach Rs 12.90 lakh crore – reflecting the buoyancy of the economy and the impact of anti-tax avoidance measures.

For the current financial year, capital expenditure (capex) is expected to increase by 35.4% to Rs 7.5 lakh crore to continue the public investment recovery of the pandemic-stricken economy. Last year, the capex was set at Rs 5.5 lakh crore.