Now reviewing the budgets of the last few years, it is seen that the total fiscal deficit has increased continuously in the last four years. Even in the last budget i.e. for the financial year 2022-23 where the total revenue shown in revenue and capital sector was Rs 39,44,909 crore, in the first six months Rs 12,03,748 crore has been collected so far. On the other hand, the total expenditure was 18,23,597 crores. So it does not take an economist to understand that if revenue and capital sector incomes do not grow as expected, the overall fiscal deficit will widen. Therefore, even before the presentation of the annual income-expenditure account of the government, after the budget, the prices of goods will increase again or the income tax rate will be increased. About 40 crore middle class of the country will suffer because the impact of taxes will fall directly on them first.
However, the government needs a lot of money to run its large operations smoothly. But sources of finance are limited. The government’s main means of raising money are indirect taxes such as excise and customs duties levied on goods manufactured and imported from abroad, and GST levied on the supply of goods and services. It also includes revenue from personal income tax and company tax as direct taxes. However, it should be remembered that the number of taxpayers is limited and after a certain limit, it is not possible to impose additional taxes on them either for economic or political reasons. On the other hand, it is not possible to manage the government expenditure or to stop the supply of money to various social projects immediately, so one of the alternative ways to increase the government’s income is to sell off the land-deposit or property held by the state-owned organization or the government and earn money by selling it. Just like the landlords of old. And not even that, borrowing from domestic (Reserve Bank) or international organizations. And the last weapon is money printing. But if money is collected outside the budget in this way, there is a danger that the basic structure of the country’s economy will collapse along with the price increase, just as it was seen in Sri Lanka a few months ago.
And that is why the government is somewhat relieved to see that the tax collection in the budget is on the whole on par. From here it can be understood that the wheel of economy is turning in the right direction which is a matter of praise for all governments. Therefore, at the end of the financial year, the success of revenue collection by turning back to the speech of the government ministers and promoting the success of the seven priests has become a part of the necessary work system, like doing achman before the puja, regardless of the actual situation! However, the collection rate of Personal Income Tax or GST this financial year has undoubtedly reassured the Finance Minister. To the relief of the finance minister, the income tax collection till December 17 last year was almost 26% higher than the previous year and the total collection so far this fiscal year is Rs 13,63,649 crore. Even in the last month, the GST collection has crossed the Rs 1.5 lakh crore mark. However, neither demonetisation nor the collection of the National Pipe Line Scheme launched in the previous budget has come close to the target. Only Rs 24,500 crore (targeted at Rs 65,000 crore) has been collected in the first seven months from the decentralization of state-owned enterprises, which is only about one-third of the target level. Out of the revised target of Rs 1,24,179 crore in the National Pipe Line Scheme, only Rs 33,422 crore has been collected so far. Therefore, according to many, increasing government revenue with taxpayers’ money is actually like frying fish in fish oil.
And that’s why a question comes back to many people that if the government revenue increases, what is the benefit of the common people, or is there any solution for the common people as a result, or does Hasim Sheikh or Rama Kaivart not change the water picture of life!
In fact, there is no answer in one word. Let’s talk about two incidents in this context. Vaikuntha Babu of our neighborhood owned a lot of property; Land, three shops, five ancestral houses, a big lake and the income from selling crops, business cards, renting houses and selling pond fish would not be bad. But in spite of this, his wife did not wear more than one or two sarees a year, and the condition of the boys and girls was also reduced by being austere. No one can slander him that he ever paid for puja or did any charity. So even though Vaikuntha Babu was a very rich person, neither his family nor others benefited from it. To tell the truth, the family members spent their days in extreme misery. Gauri Babu used to live in our neighborhood. Banedi is a wealthy man, but now in dire straits due to unaccountable spending. The land-tommy, houses-houses are all sold and sold, and now the family is running somehow by borrowing to get their hands on them.
If the government can be compared with the above Baikuntha Babu or Gauri Babu, it is understood that even if the revenue collection is sufficient, if it is not properly invested in the country’s economy, it is of no benefit to the people, similarly, the unaccounted extra-budgetary expenditure of the government bankrupts the government and imposes a miserable burden on the people. . Therefore, the increase in the prices of edible oil and crude oil in the international market in the first half of this financial year will bring some relief to the government due to lower prices at the end of the year and the availability of cheap imports from Russia. Along with this, direct and indirect tax collections are expected to exceed target levels.
Earlier I was asked by someone whether there is any benefit to the general public in increasing government revenue. Hope he got the answer by now. However, it goes without saying that in a country like India where there is a structure of democracy, the government’s austerity policy will not work (or to be honest, it does not even have a chance). Not only to increase the government employees but also to improve the overall development of the large middle class or low income population, the government remains obligated to spend money on various social sectors like Ayushman Bharat, Pradhan Mantri Awas Yojana or providing free rations. So the government can provide money to carry out these huge activities through various types of direct or indirect taxes. Apart from this, there is a theory called trickle down theory in economics. The point is that any increase in income in a sector will trickle down to the bottom and thereby benefit those at the bottom. So if any fiscal policy of the government increases the overall income (GDP), everyone benefits overall.
But all these are not numerology but theory. Is there any direct way to understand the growth of the economy to the general public? Yes, the best example of this is the demand for four wheelers or motor vehicles. According to economists, this is the best way to know the state of the economy. Also, the growth of real estate, tourism and hotel industry can be seen in the economy. When the economy is bad, they are affected first and when it is strong, they develop or grow first. We saw that in the recent epidemic. And in this financial year, his counter race has started. Compared to the previous two years, the growth rate in automobiles is overall satisfactory, although the growth in this case is less than 9.81% compared to 2019. The same can be said in the case of real estate. Even in the last eight years excluding 2014 and 2019, there has been an unexpected increase in this area, with a growth rate of 54%. These are proofs that the country’s economy is slowly turning around. So in the final judgment it can be said that if the government’s income increases, everyone benefits.