Finance Ministry said, with increased tax revenue, India’s way to become a $5 trillion economy will be easy

The Finance Ministry said on Thursday that the focus on capital expenditure in the budget announced in the current fiscal will boost manufacturing and tax revenue collection, putting India on the path to become a $5 trillion economy. India’s gross tax collection rose to ₹27.07 lakh crore ($356.82 billion) in the fiscal year 2021/22 ending March, exceeding the revised target by a wide margin.

Tax collection was Rs 27 lakh crore
The central government’s focus on making India a global economic powerhouse and a host of measures adopted towards this commitment have been directly reflected in India’s GDP growth in recent years, the ministry said in a statement. In February, India’s Finance Minister Nirmala Sitharaman raised the tax receipts target to Rs 25.16 lakh crore for FY22 from the earlier estimate of Rs 22.17 lakh crore.

Last year there was an increase in tax collection
Meanwhile, direct tax collection stood at Rs 14.10 lakh crore in the reporting year, which is Rs 3.02 lakh crore more than the budget estimate. Direct tax collection grew by 49 per cent in FY 2022, while indirect tax collection grew by 30 per cent. In direct taxes, corporate tax collections grew by 56 per cent, while personal income tax increased by 43 per cent.

emphasis will be placed on
The ministry said that apart from a brief setback due to COVID-19, the government has maintained GDP growth above 10 per cent in recent years. GST, a simple way to collect indirect taxes, has been a revolutionary step in boosting India’s GDP. The ministry said that with the emphasis on capital expenditure in the Union Budget for FY 2022-23, the coming years will see an increase in domestic manufacturing as well as an increase in employment. These in turn will boost tax contribution directly to the exchequer.