Appeasing the powerful: reduced corporate taxes leading to resource constraints

By Bharat Dogra
In 2019 the Government of India announced a reduction of corporate tax rate from 30 per cent to 22 per cent, along with a further reduction to 15 per cent for new corporations.
The Parliamentary Committee on Estimates has recently stated that this has led to a revenue loss of Rs. 1.84 lakh crore to the public exchequer in the two years 2019-20 and 2020-21.
This raises the question regarding how much we have lost in terms of funds availability for priority tasks. What we should not forget is that many important schemes and programs have been facing severe resource constraints. Allocations less than needed have been made for important welfare and development programs and then on top of this further cuts have been made, citing resource constraints. Hence questions are bound to be asked regarding the additional funds that could have become available for priority needs if this loss of revenue amounting to Rs. 1.84 lakh crore had not taken place.
Here we present calculations to show that an amount of Rs. 1.84 lakh crore would have been adequate to exactly double the allocations for as many 20 departments and ministries which are very important for welfare and development.
In the table below we show the combined actual expenditure for 2019-20 plus 2020-21 for 20 ministries and departments. By adding these we get a figure of Rs. 1.84 lakh crore. In other words if the loss to revenue caused by corporate tax cut had not taken place then there was a potential of exactly doubling the budget/expenditure of all these 20 departments and ministries.
The expenditure data has been taken from the expenditure profile for these two years provided by the Budget Division of the Ministry of Finance, and then adding the figures for the two years.
Table—Combined Actual Expenditure of 20 Ministries and Departments for 2019-20 plus 2020-21:
1.Ministry of Environment, Forests and Climate Change---Rs. 4486 crore
2. Ministry of Labor and Employment—Rs. 23003 crore
3. Ministry of Minority Affairs—Rs. 8351 crore
4. Department of Social Justice and Empowerment—Rs. 16771 crore
5. Department of Empowerment of Persons with Disabilities—Rs. 1864 crore
6. Ministry of Tribal Affairs—Rs. 12821 crore
7. Ministry of Women and Child Development—Rs. 42395 crore
8. Ministry of Youth Affairs and Sports—Rs. 4384 crore
9. Department of Science and Technology—Rs. 10300 crore
10. Department of Health Research—Rs. 4984 crore
11. Ministry of Ayush—Rs. 3910 crore
12. Department of Pharmaceuticals—Rs. 1009 crore
13. Ministry of Culture—Rs. 4629 crore
14. Ministry of Development of North-Eastern Region—Rs. 4510 crore
15. Department of Animal Husbandry and Dairying—Rs. 5175 crore
16. Department of Water Resources, River Development and Ganga Rejuvenation—Rs. 14650 crore
17. Ministry of Micro, Small and Medium Enterprises—Rs. 12152 crore
18. Ministry of New and Renewable Energy—Rs. 6051 crore
19. Ministry of Panchayati Raj—Rs. 1184 crore
20. Ministry of Planning---Rs. 1316 crore
Total—Rs. 183945 crore (approximately) Rs. 1.84 lakh crore.
As can be easily seen, several very important ministries and departments are covered in the table above, including the Ministry of Women and Child Development, Ministry of Labor and Employment, Ministry of Tribal Affairs, Ministry of Minority Affairs, Department of Social Justice and Empowerment and Department of Science and Technology.
Several schemes and programs of these various ministries and departments have been suffering due to lack of availability of adequate resources and have been in news due to this. Imagine what a relief it would be if the resources available could be doubled, as would have been possible if the loss on account of arbitrary and unwarranted cut of corporate tax was avoided.
Here it may be recalled that this cut in corporate tax, announced in September 2019 just before the Howdy Modi event organized in the USA, had attracted a lot of criticism at that time as well.
The lesson for future is that in situations of severe resource constraints revenue opportunities should not be squandered just to appease some powerful interests. The costs for people can be very heavy, as was soon seen during the pandemic times which followed this tax cut.
---
The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include ‘Planet in Peril', ‘Man over Machine’ and ‘A Day in 2071’

Comments

Eight years of empowering tribal communities through water initiatives in Chhattisgarh

By Gazala Paul* In the heart of Chhattisgarh, amidst the echoes of tribal life, a transformative journey has unfolded over the past eight years. The Samerth organization has diligently worked to elevate the lives of indigenous communities in the Kawardha district through the project, "Enabling Baiga Community to access safe drinking water."

Towards 2024: Time for ‘We the People of India’ to wake up before it is too late

By Fr Cedric Prakash SJ* It is Constitution Day once again! We, the people of India, gratefully remember 26 November 1949 when the Constitution of India was passed and adopted by the Constituent Assembly. The Constituent Assembly comprised women and men of distinction, who were able to represent the heart and soul of the people of India without fear or favour. They gave of their best, so that we may a visionary Constitution, which would be the mainstay for and of democracy in India!

Regretful: Kapil Dev retired not leaving Indian cricket with integrity he upheld

By Harsh Thakor Kapil Dev scaled heights as an entertainer and a player upholding the spirit of the game almost unparalleled in his era. In his time he was cricket’s ultimate mascot of sportsmanship On his day Kapil could dazzle in all departments to turn the tempo of game in the manner of a Tsunami breaking in. He radiated r energy, at a level rarely scaled in his era on a cricket field. Few ever blended aggression with artistry so comprehenisively. Although fast medium, he could be as daunting with the ball as the very best, with his crafty outswinger, offcutter, slower ball and ball that kicked from a good length. Inspite of bowling on docile tracks on the subcontinent, Kapil had 434 scalps, with virtually no assistance. I can never forget how he obtained pace and movement on flat pancakes, trapping the great Vivian Richards in Front or getting Geoff Boycott or Zaheer Abbas caught behind. No paceman carried the workload of his team’s bowling attack on his shoulders in his eras muc

Critical factors that determine, contribute to the success and effectiveness of NGOs

By Rohit Rakshit Over the last few years, I have been fortunate to work with numerous non-governmental organizations (NGOs) across various states in the country. This experience has allowed me to gain insights into their diverse areas of work while also enabling me to analyze the key attributes that contribute to the success of a good NGO. According to my observations, the following are the critical factors that determine the effectiveness of an NGO.

How the slogan Jai Bhim gained momentum as movement of popularity and revolution

By Dr Kapilendra Das* India is an incomprehensible plural country loaded with diversities of religions, castes, cultures, languages, dialects, tribes, societies, costumes, etc. The Indians have good manners/etiquette (decent social conduct, gesture, courtesy, politeness) that build healthy relationships and take them ahead to life. In many parts of India, in many situations, and on formal occasions, it is common for people of India to express and exchange respect, greetings, and salutation for which we people usually use words and phrases like- Namaskar, Namaste, Pranam, Ram Ram, Jai Ram ji, Jai Sriram, Good morning, shubha sakal, Radhe Radhe, Jai Bajarangabali, Jai Gopal, Jai Jai, Supravat, Good night, Shuvaratri, Jai Bhole, Salaam walekam, Walekam salaam, Radhaswami, Namo Buddhaya, Jai Bhim, Hello, and so on.

Martin Crowe played instrumental role in making New Zealand a force in world cricket

By Harsh Thakor* Late Martin Crowe was the perfect manifestation of how mere figures could not convey or do justice to the true merit of a batsman. Crowe was arguably the most complete or majestic batsmen of his era or the ultimate embodiment of batting perfection, or the classical batsmen. He perished 7 years ago, due to a rare and aggressive form of cancer, follicular lymphoma, which originated in 2012. In September, we celebrated his 60th birthday but sadly he left for his heavenly abode.

Raising temperature of frozen foods by 3 degrees from -18°C to -15°C can slash carbon emissions: Study

By Payel Sannigrahi Frozen food temperatures could be changed by just three degrees to save the carbon dioxide emissions of 3.8 million cars per year, research suggests.

Odisha leadership crisis deepens: CM engages retired babus to oversee depts' work

By Sudhansu R Das Over decades, Odisha has lost much of its crop diversity, fertile agriculture land, water bodies, employment potential, handicraft and handloom skills etc. The state has failed to strike a balance between the urban and rural sector growth; this leads to the migration of villagers to the urban areas leading to collapse of the urban infrastructures and an acute labor shortage in rural areas. A large number of educated, skilled and unskilled Odia people have migrated to other states for higher education, quality jobs and for earning livelihood which plummet the efficiency level of government departments. Utmost transparency in the recruitment and promotion in the state government departments will improve governance mechanisms in the state. "No near and dear one approach" in governance mechanisms can only achieve inclusive growth for the state on payment basis. This is a moral hazard. When so many educated young people seek employment outside the

Ceasefire a tactical victory for Palestinian resistance, protests intensify across globe

By Harsh Thakor* The Zionist leadership and Netanyahu’s government were compelled to concede the defeat of their first attempt after almost 50 days of daily fighting in the Gaza Strip. Netanyahu was forced to concede that he was unsuccessful in suppressing the Palestinian Resistance; and that the release of the prisoners was only plausible because they accepted Hamas’ terms.

1982-83 Bombay textile strike played major role in shaping working class movement

By Harsh Thakor On January 18th, 1982 the working class movement commemorated the 40th anniversary of the Textile Workers Strike that lasted for 18 months, till July 1983. It was landmark event that played a major role in shaping the working class movement. With more than 2.5 lakh workers from 65 textile mills joining in this strike for almost two years, this strike became one of the most significant strikes in terms of scale and duration All democrats should applaud the mill workers’ united battle, and their unflinching resilience an death defying courage continues to serve as a model for contemporary working-class movements. Many middle class persons harboured opinions that the Textile workers were pampered or were a labour aristocracy, ignorant of how they were denied wages to provide for basic necessities. The Great Bombay Textile Strike is notably one of the most defining movements in the working class struggles in Post-independent India. Bombay’s textile industry flourished in

Search This Blog