The tax revenue targets are accustomed to every financial year, keeping in context the economic growth achieved during the previous annual budget. The deputy chief minister of Delhi Manish Sisodia pledged on Tuesday to onboard more tax collection revenue for funding the major part of its annual budget 2020-21 worth Rs. 69,000 crore into reforms for the benefit of the Indian citizens. The previous year’s tax revenue estimation stood at Rs. 44,000 Crore, while the projected tax revenue from the next financial year has marginally dropped by Rs 1,000 crore.
Last year tax collection fell way short of the standards set up by the government, as only Rs 29,300 crore enforced as the revenues of the Indian administration. Tax revenues are the prominent source of income for the Central Government as it allows them to reinvest it into the more productive scale of the network for efficient development of the low-block industries.
WHAT EMPHASIS DOES EFFICIENT FINANCIAL MANAGEMENT HAVE ON THE PER CAPITA INCOME OF HOUSEHOLDS?
The economic development of a developing country like India depends on two significant factors, i.e. investment and production. To scale up the production levels in India, the concept of demand and supply need to work hand-in-hand with constant recruitment in every field.
The procurement of savings impacts the whole channel of production and investment. Savings could help nurture the economic stagnation of the country, as they channelize to intensify the production resources in the form of investment.
The key aspect in the evaluation of economic development in India is the infrastructural facility that is made available for proper growth and upliftment of the economy. In the absence of key industries like coal, power, and oil, the development of other industries will be hampered. It is here that financial services play a crucial role by providing funds for the growth of infrastructure industries.
Is India compliant enough to address the issues like low per-capita income and higher unemployment rates? What we perceive from the actions of the government is that it is capable enough to support the affected people by combating their hindrance, but more recently, it has failed to achieve financial targets due to constant political interference and concrete debates on the account of policymakers, professional journalism community, and Members of the Parliament.
The working of an efficient financial unit depends on maintaining the balance and discipline in the pristine economic activities, and thus I believe that the government can create a congenial business environment so neither too much inflation nor depression is experienced.
Hence, if the government takes initiatives in scaling the productive resources into investment then the aim of gaining the same per-capita income levels as that of Singapore might become a possibility.
The money market which is a beneficiary of the Indian financial system provides working capital to the businessmen and manufacturers, due to which production increases in the industrial sector. With the ever-growing competition in various sectors of the nation, the employment rate looks to the surge in the coming times resulting in more per-capita income for the households.
IS THE TARGET SET THEORETICALLY POSSIBLE OR JUST A FALLACY?
On Tuesday, while briefing the annual budget for Delhi, finance minister Manish Sisodia announced that it foresees an ambitious target of taking the per capita income of Delhi on par with Singapore by 2047. And was reported saying: ‘To make this happen, we have to increase the income of our citizens by about 16 times which is difficult, but not impossible.’
The latest Delhi economic survey states that an average Delhite earned RS.2.74 lakhs annually in 2019-20, but it reduced to Rs. 2.54 lakhs in 2020-21. A subsequent dip of 7.53% was registered in the per capita income of an individual.
If we trust the information gained by various reports, the per capita income of Delhi is three times higher than the national average, but is it really the case or just another fallacy on part of the government-related issues?
Although the government has increased its investment share in prominent sectors like education and health, it has also imposed taxes on various other commodities which raises the burden of an individual to pay the required tax amount from its earned income.
The governing committee needs to give assurances of income in my opinion to a person who is competent and willing to work with hard-working nature and dedication. Along with that, the focus should be on diminishing the economic and social disparities between various communities.
WHAT ARE THE CHALLENGES AHEAD IN THE ROADMAP OF INCREASING THE PER CAPITA INCOME?
Turning the situation around and simply setting ambitious targets would not provide the desired results to the Government. The roadmap ahead is a challenging one as the figures set by the governing committee are enormous and difficult to achieve.
In the present scenario, the government is not even competent enough to scale up the production in the domestic channels as more and more people suffer the consequences of Ill functioning of the Government. It drastically changed the mindset of people to transform their income into savings as they had no reassurances of job opportunities from the Government.
Every year while briefing the annual budget, extra emphasis has been put on the education and the health sectors to improve and play a crucial role in the economic growth of India.
What I wonder is, has the situation changed drastically or people have become smarter to adapt to the business environment and conduct themselves accordingly. The government activities have improved without a doubt, but the cultural change that was required in the thought process of the economy has it ever been implemented, the answer would be a negative one for sure!
The Delhi Government primarily faces two challenges in the coming times,
Firstly, the Centre should go back and deliver on its promise of providing compensation, and the government assures the public that with the help of intellectual intelligence, it would prevent any leaks in taxes in the next auditing session of the financial year.
Secondly, The assurance for revenue protection ending on June 30, 2022. After which, there would be a real dilemma in collecting tax revenue as there is no clarity whether the estimated figures would be achieved or not.
Challenges onboard for the Indian economy are that it would require almost 8-9% growth for 22 years to boost per capita income, so whether the ambitious targets are realistic or not is still a big question of debate in the communities.
What are the percentage chances of matching the per capita income of Developed countries like Singapore?
In recent times, various expert panels and economic analysts including former RBI governor Dr. C Rangarajan have put forward the ideas of reducing poverty or improving the living standards of the vulnerable groups for India to achieve its economic potential and growth.
They stated that Indian is over a $2-million economy today but to double this figure, it would need the GDP to grow substantially at a high of 8 to 9 percent per annum for a period of 9 to 10 years. Even then we will not be there, where we are supposed to be. To even touch the sights of the developed economies, we will have to work emphatically hard to attain incremental growth every year.
The chances right now stand at almost 40%, which is quite low according to my opinion as our nation with the number of resources and manpower available should be among one of the most developed countries in the world. Without reducing the deficit and borrowings, India could not even take one step further in attaining the accomplishment of higher per-capita Income, such are the conditions of the sectors in India.
WHAT COULD BE THE PROVISIONS LAID DOWN TO ACHIEVE A HIGH IN THE OVERALL GDP GROWTH?
Over the years, the reforms of the States and the Central Government have been scrutinized, and more questions have been raised on the ability of the political leaders to guide the economy on the pathway of becoming a developed nation.
As much as I have evolved more knowledge on the topic, my hypothesis has been to argue the government’s motive as there is a deep hole in the economy, which is known as corruption or political interference in unnecessary issues. The government should either step ahead and make its mark by announcing employment-generated schemes and seriously implement them this time around or should instill a methodology where people should get the desired platforms for carrying out their activities.
While looking at increasing the per-capita income, foremostly it has to evolve India as a developed nation, and for that, it would need the sectors like Manufacturing Industries and Airports Authority of India to step up on their own without any prohibitions by the Government;
Whether or not the vision of the Government will be successful is unknown due to the lack of clarity on government-related services. If the government is not able to progress the growth in the upcoming years, then it would be considered a solicitation act on their part, and unfortunately, the sectors would take the path of privatization to achieve constant growth by providing better employment opportunities to the Indian citizens.
The Delhi government has stepped in line to show its integration in some activities, but to achieve the status of a developed nation would be a commendable effort of all the authorities involved in reaping the economy towards a significant position than what it is today. In coming times, my opinion on the Government will not change until something extraordinary happens for the low-income communities, will the public opinion change in the next 2-3 years remains to be seen!