Tax evaders, beware! Faced with sluggish industrial growth and its impact on revenue collections, the government on Friday said it would step up “surveys” to maintain the tax buoyancy.
“We are trying to maintain (tax) buoyancy by enhancing/strengthening the tax collecting machinery; by bringing more people through surveys and other information within the tax net...”, Finance Minister Pranab Mukherjee said in the Lok Sabha.
The word ‘survey’, according to the Income Tax Act, 1961, refers to collection of information at business premises, assessing expenditure on marriages parties and other celebrations.
Replying to a debate on demands for supplementary grants of Rs 34,724 crore for this year, Mukherjee said so far in 2011-12, the revenue collections had been robust, with indirect tax collection growing by 30 per cent and direct tax revenues up 26 per cent so far. However, he conceded the government revenue would take a hit if industrial production goes down.
“If the industrial production goes down then it will have an adverse impact in future”, he said adding the government is also trying to resolve tax disputes through a settlement mechanism to unlock the money. The amount stuck in income tax cases was Rs 2,42,377 crore as on December 31, 2010 as compared to Rs 2,88,336 crore at the end of 2009.
While the industrial growth has remained in the positive territory, the pace of expansion has come down to 5.7 per cent during the April-May period this year against 10.8 per cent a year ago.
Mukherjee said that unlike last year when the government received a windfall through 3G spectrum auction, “every time luck may not favour me. So, I don’t know whether there will be any unexpected source. Keeping that in view I am keeping the fiscal control over the whole thing.”
On lowering of the economic growth projection from 9 per cent to 8.2 per cent by Prime Minister’s Economic Advisory Council, the minister said, “Even if we maintain that, it may be possible to retain the present momentum which we are having.”
He further said the growth must generate employment and it should be with moderate rate of inflation. Referring to the volatility in international crude price, the minister said, “It is just like a monkey moving the greased pole. If it move up by three inches, it comes down by five inches. It is going like that.” India largely imports Brent crude in the $116-117 per barrel price range.
