World leaders have acknowledged that Dr.Manmohan Singh steered India through 2 Major Slow Downs. Yet he made Indian Economy world’s third largest and fastest growing Economy.
When he handed over PMO to Narendra Modi India was a Robust Economy with its wheels well oiled and galloping gloriously.
Then came the 8PM of November 2016 when Modi appeared on our Television Screens and declared Demonetisation. Indian Economy came to a screeching halt all of a sudden. But he didn’t stop there he celebrated the midnight “Independence Day” and launched flawed GST.
Indian Economy could not recover after that because Modi Govt is clueless about what needs to be done to correct the path of our Development. They don’t have a plan and are too egoistic to take suggestions from the experienced and knowledgeable.
Lets do a case study on the Revenue esteems of 2019-20 to understand what was the magnitude of Economic Crisis before Covid19 was first identified in Wuhan.
GTR or Gross Tax Revenue drops by 15% highest in 20 yrs
Budget Estimates for the year 2019-20 are estimated to dip by a whopping 3.5 lakh crores.
In this the dip in Direct Tax revenue alone will be 1.8 lakh crores.
Out of which 1.05 lakh crores will be on State Revenue, 2.45 lakh crores will be for Central Revenue alone.
For Past 5-6 yrs Centre has been strategically increasing Surcharge and Cess, the Revenue generated through these is not shared with the States.
In other words we can say that the joint collection of Revenue ( Centre and States) has been nose diving while the exclusive revenue for the Centre has been on the rise.
Govt has always rubbished Economic Slow Down.
Then why this drastic dip in GTR?
In the reduced Revenue, Govt Expenditure will also reduce…which will directly impact Demand.
Govt is clueless on how to create the demand.
Lets see the Reasons behind the decline:
1. At 4.5% GDP, its the Lowest Economic Growth ever in the history of India…we know this number is with the new magical method.
2. When the Growth Rate is the lowest, instead of creating a demand by increasing the Govt Expenditure, Modi Govt chose to give Tax rebates of upto 1.45lakh crores, to Corporates and ensured their profits don’t decrease. Today India’s Corporate Taxes are at par with American Taxes, but Is India anywhere close to the size of the American Economy?
3. GST collections have not met the targets, reason is Tax Evasion continues.
4. Due to Loksabha and State Elections Govts have worked on reducing GST slabs on many commodities.
5. Import Duty Revenue also declined due to reduced consumption, Oil is highest imported commodity, unfortunately the crude prices have fallen so has the consumption.
6. To paint a ‘All is Well” picture Modi Govt has fudged figures to show better GDP % (Subhash Garg has written in his blog) unrealistic assumptions.
Is it wise to say that Corona killed Indian Economy?
Won’t it be factually correct if we say Corona disconnected the ventilator of the critically ill Indian Economy?
This financial year India will create history with 1.6% GDP if not Zero….I must add Modi hai to mumkin hai.