In an interaction with Industry after the Budget on 1st Feb 2022, FS Dr.TVS rightly mentioned that Tax to GDP ratio should go up.
Couple of thoughts related to this and other Revenue augmentation avenues;
a) Tax exemption except for Primary produce which basically are Agri products, is anathema to Value Addition. I would say that Value Add abhors tax exemption, with few exceptions!!
It also militates against the concept of Nominal GDP growth rate as it is always zero and so unaffected by inflation or deflation. In the same breath, Agri income should also be taxed at say 0.1% atleast.
Therefore, my humble submission to Govt , is to take a relook at all exempted/zero
0-rated products under GST etc.Atleast these products should be brought under 1% slab by creating a new slab.
b)Mining Royalty rates should be indexed to inflation.Revise all kinds of Quarrying rates upwards
c) EB overdues to Power generation companies as per website PRAAPTI.in is increasing every month which have touched Rs.1.07 lac cr. as of Feb 2022.
You might have noticed that this is a serious drag on the economy, which will have repercussions on the lenders .
d)Local bodies charges, EB tariffs must be indexed to inflation to keep them out of State Politics.
As on 3rd june 2022 Solar and wind energy producers are not getting paid on time.
PRAAPTI overdues are going up and the Govt must initiate special window for Renewable Energy Producers for discounting their invoices which are overdue from Discoms.
for eg.Telengana govt has not paid unit to unit adjustments for Solar power produced by Factory consumers for more than 2 years now.These overdues r outside Praapti.
So these overdues must be addressed thro Special Window facility directly from RBI etc.
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