The Survey attributed the growth to structural reforms like the introduction of GST and the digitalisation of economic transactions, which it said, led to greater formalisation of the economy, expanded the tax net and enhanced tax compliance
The Survey attributed the growth to structural reforms like the introduction of GST and the digitalisation of economic transactions, which it said, led to greater formalisation of the economy, expanded the tax net and enhanced tax compliance
New Delhi: Central government's revenue receipts have grown at a faster pace than the economic growth rate due to formalisation of the economy, even as cleaner balance sheets of banking, non-banking and the corporate sectors have led to a fresh credit cycle, according to the Economic survey 2022-23 tabled in the Parliament on Tuesday by finance minister Nirmala Sitharaman.
The Survey, a critique of the economic developments of the ongoing financial year prepared by the finance ministry, said that the Centre's gross tax revenue registered a year-on-year growth of 15.5% during April-November 2022 and net tax revenue to the Centre after the assignment to states grew by 7.9%.
The Survey attributed the growth to structural reforms like the introduction of Goods and Services Tax (GST) and the digitalisation of economic transactions, which it said, led to greater formalisation of the economy, expanded the tax net and enhanced tax compliance.
It said that cleaner balance sheets have led to enhanced lending by financial institutions and gross non-performing assets (GNPA) ratio of scheduled commercial banks has declined to a seven-year low of 5%. The Survey pointed out that growth in credit offtake and increased private capital expenditure would usher in a virtuous investment cycle.
With improved balance sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has begun as is evident from double digit growth in bank credit over the past months, the Survey pointed out.
The Survey highlighted that direct taxes grew 26% year-on -year due to corporate and personal income tax revenue collection growth in FY22. Growth rates observed in major direct taxes during the first eight months of FY23 were much higher than their corresponding longer-term averages, as per the Survey.
The Survey also said that high imports have led to 12.4% growth in the customs collection from April to November 2022. Excise duty collection declined 20.9 % during the same period.
Conservative budget assumptions have provide a buffer during global uncertainties, the Survey added.
"This resilience in the fiscal performance of the Centre has resulted due to a recovery in economic activity, buoyancy in revenues observed during the year, and conservative assumptions of macroeconomic variables in the Budget. The prudent assumptions in Budget FY23 provided a buffer to the government during global uncertainties," it said.