Skip to main content

To favour corporates, rich, Govt of India "allowed" 3-fold increase in forgone taxes in a decade: Oxfam report

By Our Representative
A new report published by the top international advocacy group Oxfam has estimated that the total revenue forgone in India as stated in the budget increased from Rs 2,06,700 crore in 2005-06 to Rs 5,89,285 crore in 2014-15, an increase by almost three times in just ten years, adding, most of this “forgone revenue” has gone in favour of the corporate sector.
Titled “India Inequality Report 2018: Widening Gaps”, the report has been authored by Himanshu, who is associate professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, and is visiting fellow at Centre de Sciences Humaines, New Delhi, and has worked as fellow at Asia Research Centre of the London School of Economics.
Pointing out that, this mean, for every rupee of tax collected, the government was losing 56 paise of taxes, which could have been collected by the government, the report states, “Most of these exemptions benefitted the rich and the corporate sector. Within the corporate sector, it was the largest corporate groups which benefited the most.”
The report notes, though “as against the statutory tax rate of 33.66%, the effective tax rate in 2005-06 was 19.26% which increased to 23.22% by 2014-15”, what is of significance is, “Most of this increase was due to the increase in effective tax paid by the smaller companies that are above Rs 10 crore and below Rs 100 crore.”
It underlines, “The effective tax rate of companies with more than Rs 500 crore increased only marginally from 19.1% in 2005-06 to 20.7% in 2014-15”, adding, “By 2014-15, the effective tax rate of companies with lowest profits was the highest and companies in the highest tax bracket paid the least effective tax rate.”
“During the same year”, the report states, “The total subsidy on all schemes meant for the poor was Rs 2,53,913 crore and excluding the petroleum subsidy, it was only Rs 1,93,642 crore. That is, the benefits given to the rich and the corporates were almost three times the subsidy provided to the poor.”
The report estimates, “This amount was more than 15 times the allocation to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the rural employment scheme. These exemptions, to the rich and the corporate sector, were accompanied by cut backs on social-sector and development spending.”
The report further says, that the trends in India’s development expenditure as a percentage of GDP suggest that the ratio fell continuously during 1985-1995, and while it did increase during 1996-2009, it has stagnated since.
A comparison of India’s spending on education and healthcare to some other countries, says the report, shows that, if calculated as expenditure on education as a percentage of GDP, “India fares poorly not only in comparison to poorer countries in the Sub-Saharan Africa and Bhutan but also vis-à-vis developing countries like Brazil.” 
“In terms of health expenditure, India is among the worst in the world”, the report says, adding,
“India’s public health expenditure stands around a paltry 1.4% of its GDP, lower than Sri Lanka, Bhutan, Sub-Saharan Africa, and Brazil.”
The result of government policy of helping the rich, the report suggests, is that India is currently among the countries with the highest levels of inequality, lower only to the Middle-Eastern countries. “The income share of the top 10% of the Indian population at 55% in 2016 is only second to the group of countries along with Brazil, second only to Middle-Eastern countries.”
“However”, the report underscores, “Unlike Middle-Eastern countries and Brazil which have had historically high levels of inequality but have seen a decline in the share of the top 10% in total income, India has seen a secular rise in the share of income accruing to the top 10% and top 1% of the population”.
It adds, “The top 1% of Indian population accounted for 22% of income in 2016, lower only to middle-eastern countries and Brazil. Here again, the trend in Brazil and the middle-eastern countries has been a secular decline as against a secular rise in the case of India in the last three decades.”

Comments

TRENDING

August 22 to be observed as Apostasy Day: International coalition of ex-Muslim groups

By Our Representative
In a unique move, an international coalition of ex-Muslim organisations has decided to observe August 22, 2020 as the Apostasy Day. To be observed for “the abandonment or renunciation of religion”, the coalition, calling upon people to join the call, said, the decision to observe the Apostasy Day has been taken because of apostasy is “punishable by death in Afghanistan, Iran, Malaysia, Maldives, Mauritania, Qatar, Saudi Arabia, Somalia, UAE, and Yemen.”

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

By Our Representative
Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book, "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

RSS' 25,000 Shishu Mandirs 'follow' factory school model of Christian missionaries

By Bhabani Shankar Nayak*
The executive committee of the International Union of Anthropological and Ethnological Sciences (IUAES) recently decided to drop the KISS University in Odisha as the co-host of the World Anthropology Congress-2023. The decision is driven by the argument that KISS University is a factory school.

India must recognise: 4,085 km Himalayan borders are with Tibet, not China

By Tenzin Tsundue, Sandeep Pandey*
There has as been a cancerous wound around India’s Himalayan neck ever since India's humiliating defeat during the Chinese invasion of India in 1962. The recent Galwan Valley massacre has only added salt to the wound. It has come to this because, when China invaded the neighbouring country Tibet in 1950, India was in high romance with the newly-established communist regime under Mao Zedong after a bloody revolution.

Time to give Covid burial, not suspend, World Bank's 'flawed' Doing Business ranking

By Maju Varghese*
On August 27, the World Bank came out with a statement suspending the Doing Business Report. The statement said that a number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur*
Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Delhi riots: Cops summoning, grilling, intimidating young to give 'false' evidence

Counterview Desk
More than 440 concerned citizens have supported the statement issued by well-known bureaucrat-turned-human rights activist Harsh Mander ‘We will not be silenced’ which said that the communal riots in Delhi in February 2020 have not been caused by any conspiracy, as alleged by the Delhi Police, but by “hate speech and provocative statements made by a number of political leaders of the ruling party.”

WHO chief ignores India, cites Pak as one of 7 top examples in fight against Covid-19

By Our Representative
In a move that would cause consternation in India’s top policy makers in the Modi government, Dr Tedros Adhanom Ghebreyesus, World Health Organization (WHO) director-general, has singled out Pakistan among seven countries that have set “examples” in investing in a healthier and safer future in order to fight the Covid-19 pandemic.

Tata Mundra: NGOs worry as US court rules World Bank can't be sued for 'damages'

By Kate Fried, Mir Jalal*
On August 24 evening, a federal court ruled that the World Bank Group cannot be sued for any damage caused by its lending, despite last year’s Supreme Court ruling in the same case that these institutions can be sued for their “commercial activity” in the United States.