Despite Order No. 1000 Planning Gaps for (Certain) Merchants OPSI Annual Meeting 2013
Indian Merchants’ Chamber Discussion on Amendments proposed in Finance Bill 2013 21 March 2013.
-
Upload
oswald-foster -
Category
Documents
-
view
213 -
download
1
Transcript of Indian Merchants’ Chamber Discussion on Amendments proposed in Finance Bill 2013 21 March 2013.
Indian Merchants’ Chamber
Discussion on Amendments proposed in Finance Bill 2013
21 March 2013
The number game
Budget 2013–2014— Thought sharing by EYPage 3
Macro assumptions
► GDP Growth at 6.1% - 6.7%► Nominal GDP Growth at 13.4%► Assumed inflation rate at 7% if real GDP growth is about
6.4%
Budget 2013–2014— Thought sharing by EYPage 4
Non Plan Expenditure / Subsidies
Expenditure(1)
BE 2012-13(2)
RE 2012-13(3)
BE 2013-14(4)
% change in (4) over (3)
Non Plan 969900 1001638 1109975 10.8
Plan 521025 429187 555322 29.4
TOTAL 1490925 1430825 1665297 16.4
Major Subsidies (2)
RE 2012-13(3)
BE 2013-14(4)
% change in (4) over (3)
Food 85000 90000 5.9
Fertilisers 65974 65972 0
Petroleum 96880 65000 (33.0)
TOTAL 247854 220972 (10.8)
Rs crores
Budget 2013–2014— Thought sharing by EYPage 5
Revenue
Revenue RE 2012-13 BE 2013-14 % change
Gross Tax Revenue 1038037 1235870 19.1%
Non tax Revenue 129713 172252 32.8%
Total Revenue Receipts 8718276 1056331 21.2%
Corporate Tax 333417 376782 13%
Surcharge 15004 30519 103%
Education Cess 10453 12219 16.9%
Taxes on income 193932 229502 18.3%
Surcharge - 4400 -
Education Cess 5998 7017 17%
Customs 164853 187308 13.6%
Excise 171996 197554 14.9%
Service Tax 132697 180141 35.8%
Rs crores
Budget 2013–2014— Thought sharing by EYPage 6
Implied tax buoyancies
# Type of taxFY14 Tax buoyancy (% change
in tax revenue/ % change in GDP at market prices)
1 Gross Tax Revenue 1.48
2 Corporation Tax 1.26
3T axes on Income other than Corporation Tax 1.53
4 Customs 1.02
5 Union Excise duties 1.11
6 Service Tax 2.67
Overall expenditure increase of 16.4% is being financed by assuming a nominal growth of 13.4% and a buoyancy of nearly 1.5 in gross tax revenues. This seems unrealistic.
This buoyancy was 0.93 in FY12 and 1.3 with respect to RE in FY13.
Reaction to the Budget:
EY – ET Budget Poll
Budget 2013–2014— Thought sharing by EYPage 8
EY – ET Budget Poll
Majority of the respondents agreed that:► More was expected from the Budget in terms of
► Clear road map on GST► Clarification on indirect transfer► Guidelines on step taken to implement the Shome committee reports on
GAAR and Indirect transfer ► 60% of the respondents felt that foreign investors had no cause for
cheer with the Budget provisions► On the policy front, the Budget lacked incentives to attract foreign
investments which could impact growth► While the FM has kept the indirect tax rates steady and sought to
regularize the property market, increase in surcharge rates and ambiguity on TRC have not gone down well.