The Centre for Budget and Governance Accountability and Oxfam India have urged the Finance Minister to take a re-look at certain tax exemptions, to raise resources for welfare schemes.
Expressing concern at the low tax-GDP ratio at a press meet here on Tuesday, the civil society organisations said tax exemptions were going up but investments were declining (from 36 per cent to 32 per cent).
“The revenue foregone due to exemptions stands at 80 per cent. Even if 50 per cent is retained, most of the country's development needs can be taken care of,” said Mr Praveen Jha, Professor of Economics at Jawaharlal Nehru University.
Stressing that the overall level of exemptions, such as to corporates, IT and ITeS and items luxury consumption, was much higher in the light of the development deficit in the country, Mr Jha said, “We have to see whose purpose these exemptions are serving”.
Oxfam India CEO, Ms Nisha Agrawal, said, “The Budget this year is doubly important as it is also the year when the Twelfth Plan will be launched.”
Hence, it is more important that the Government increases public spending and focuses on inclusive growth, she added.