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

From snowstorms to heatwaves: India’s alarming climate shift in 2025

By Dr. Gurinder Kaur* Climate change is no longer a future concern—it is visibly affecting every country today. Since the beginning of 2025, its effects on India have become starkly evident. These include unseasonal snowfall in hill states, the early onset of heatwaves in southern regions, a shortening spring season, and unusually early and heavy rainfall, among other phenomena.

'Incoherent, dogmatic': Near collapse of international communist movement

By Harsh Thakor* The international communist movement today lacks coherence or organizational unity. Many groups worldwide identify as communist, Marxist-Leninist, or Maoist, but most promote dogmatism, reformism, or capitulation, using revolutionary rhetoric. Some trace their origins to historical betrayals, like Trotsky’s efforts to undermine the Soviet socialist transition or the 1976 coup in China that restored a bourgeoisie under Deng Xiaoping. Others focus on online posturing rather than mass engagement. Small communist organizations exist in places like Turkey, South Asia, and the Philippines, where Maoist-led struggles continue. No international forum unites them, and no entity can forge one.

Priced out of life: The silent crisis in India's healthcare... who pays attention, and who takes responsibility?

By Aysha* Manisha (name changed) has been living with a disease since the birth of her third child—over ten years now—in the New Seemapuri area of North East Delhi. She visited GTB Hospital, where a doctor told her that treatment would cost ₹50,000, as the hospital would charge for the cost of an instrument that needs to be implanted in her body. Several NGOs have visited her home, yet she has received no support for treatment and continues to live with the illness. Manisha is divorced, without access to ration or pension, and lives with her three children by begging outside a temple.

Madhya Pradesh village's inspiring example of how small budget effort conserves water amidst heat wave

By Bharat Dogra Heat waves have been intensifying over vast areas of India in recent days and there are also many reports of water scarcity making the conditions worse for people. However the situation can differ significantly in various villages depending on whether or not significant water conservation efforts have been made. In recent years I have visited several villages of good water conservation efforts where I noticed that even at the time of adverse weather conditions, people of these villages as well as farm and other animals feel important relief in terms of access to adequate water. Due to water and moisture conservation, conditions of farms and pastures is also much better. What is more, with the participation and involvement of people, even quite low budgets have been utilized well to achieve very useful and durable results.

Population explosion: India needs a clear-headed policy, data-driven governance, long-term planning

By N.S. Venkataraman* At the upcoming G7 summit in Canada, Prime Minister Narendra Modi has been invited as a special guest, with Canadian Prime Minister Justin Trudeau citing two main reasons: India’s rise as the world’s fifth-largest economy and its status as the most populous nation. While economic growth is undoubtedly a point of pride, the latter distinction—India’s population—raises an important question: should this be seen as a strength or a source of growing concern? India has not conducted a national census since 2011, leaving the current population figures largely speculative. Estimates place the population at around 1.4 billion, with projections reaching 1.8 billion by 2050. Despite modest declines in fertility and death rates, the annual population growth remains between 1.5% and 2%. The next census, scheduled for 2026, will provide a more accurate demographic picture, but until then, policymaking remains uninformed by crucial data. Over the past eleven years, the gov...

Victim to cricketing politics, Alvin Kalicharan was a most organized left handed batsman

By Harsh Thakor* On March 21st Alvin Kalicharan celebrates his 75th birthday. Sadly, his exploits have been forgotten or overlooked. Arguably no left handed batsman was technically sounder or more organized than this little man. Kalicharan was classed as a left-handed version of Rohan Kanhai. Possibly no left-handed batsmen to such a degree blend technical perfection with artistry and power.

Vishwamitri river revival? New report urges action on pollution, flood risks, wildlife protection

By A Representative The Vishwamitri Committee, formed by the Gujarat State Human Rights Commission, has submitted two supplementary reports on June 5, 2025, detailing efforts to rejuvenate the Vishwamitri River in Vadodara, considered Gujarat's cultural capital. The reports (click here and here ) respond to directives from a May 26, 2025, GSHRC hearing. Comprising environmentalists, urban planners, and zoologists like Neha Sarwate, Rohit Prajapati, Dr. Ranjitsinh Devkar, Dr. Jitendra Gavali, and Mitesh Panchal, the committee focuses on mitigating pollution, stabilizing riverbanks, managing flood risks, and preserving biodiversity, particularly for crocodiles and turtles.

Mumbai jetty project: Is Colaba residential associations' outrage manufactured?

By Gajanan Khergamker When the Maharashtra Maritime Board (MMB) filed an affidavit before the Bombay High Court defending its long-planned public jetty project, it did more than just respond to a writ petition by a Colaba Residents Association. It exposed, albeit inadvertently, a far more corrosive phenomenon festering beneath the surface of urban civil life across India—a phenomenon where residential associations, many unregistered and some self-professed custodians of ‘public sentiment,’ conspire to stall governance under the veil of representation.

Central London discussion to spotlight LGBTQ+ ex-Muslim rights and persecution

By A Representative On June 13, 2025, the Dissident Club in Central London will host a public discussion to mark the 18th anniversary of the Council of Ex-Muslims of Britain (CEMB) and to commemorate World Refugee Day. The event, scheduled from 7:00 to 9:00 pm, will feature speakers Ali Malik, Maryam Namazie, and Taha Siddiqui, who are expected to address the intersecting challenges faced by LGBTQ+ ex-Muslims globally.

Search This Blog