The latest claim made by the Government, in a series of alleged benefits from the demonetisation of November 2016, is the drastic reduction of cash-to-GDP ratio from 12% to 9%.  Our Prime Minister had made this claim w hile addressing the company secretaries at a programme to mark the golden jubilee year of Institute of Company Secretaries of India (ICSI) in Delhi on 4 October 2017. It is a moot question whether a lower Currency in Circulation-GDP (CIC-GDP) ratio is a sign of a more developed economy or not. Before venturing to find its answer, let us examine certain facts. Let us compare our CIC-GDP ratio from FY 2009-10. CIC-GDP ratio of 12.3% in 2009-10 seen a gradual reduction to 11.6% in 2013-14, when Dr. Manmohan Singh relinquished his office. Under the leadership of Shri. Narendra Modi, by 2015-16, it had shot up to 12.2%, and then witnessed a drastic, if disruptive, reduction to 8.8% in 2016-17.  Our Prime Minister conveniently overlooked or glossed ove...

An infographic, explaining the retail selling price of petrol, was being circulated in the social media by IT cell of BJP. We are living in a world where even Government published data needs scrutiny, so how can a party led information be not scrutinized. So let's get to work. The infographic shows retail selling price of petrol in Delhi on 16/09/2017 is ₹70.48/ltr and the tax components shared between State and Union as: Delhi Government               = ₹27.44/ltr Central Government            = ₹12.46/ltr This prima facie creating an impression that Delhi enjoys more than double petrol tax compared with Centre. Firstly, the above claim is having a manifest arithmetical error. Simple addition of State VAT of  ₹14.98 with the purported central government share of excise duty ₹9.02 gives only  ₹24.00, not  ₹27.44 as depicted in the ...

In the early days of August, major news outlets carried headlines claiming huge growth of tax payers and tax collections, which they attributed to the positive outcomes of the demonetisation. I had done a detailed fact check of the above claim in an article in the wire . Couple of days back, media  reported, yet again, that revenue from the direct tax grew at 17.5% during Apr-Aug period, creating a perception that, there is a quantum leap in our tax collections. This needs to be analysed in detail to understand whether there is anything phenomenal about this growth or is this growth is following the current growth trend. This year’s union budget's target revenue collection was ₹9.80 lakh crores from direct tax, of which ₹5.39 lakh crores in corporate tax and ₹4.41 lakh crores in income tax. Meanwhile, the direct tax collected during Apr-Aug period is ₹2.24 lakh crores, which is 22.9% of the budget target of direct tax. During the same period last year, ₹1.89 l...

On 18 th August, Ministry of Finance issued a clarification about number of tax payers added post-demonetisation,  hoping to set at rest the confusion – and skepticism – that had resulted from four different numbers being quoted by the prime minister, the finance minister, the Economic Survey and the Central Board of Direct Taxes. Of course, these numbers of 56 lakhs, 5.4 lakhs, 91 lakhs and 33 lakhs as the new tax payers are quite confusing and perplexing. Finally the press release confessed that these numbers denote nothing but “different period and different type of taxpayers”. The maze that the Government has laid is literally tread for any factual unbiased analysis and comparison of these numbers. Even then, let me try to decode this puzzle.  Number quoted in the Prime Minister’s Speech (56 lakhs) First, let me first dissect the clarification given to the statement made by the Prime Minister. The clarification is as follows: “The Prime Minister’s ...

On 8 th August Morning, most of our newspapers, both national as well as regional ones carried big headlines about the giant leap in the income tax returns received as well as the increase in advance direct tax collections. The media has attributed this huge achievement to the demonetisation executed by the Government, exactly 9 months before on 8 th November 2016. Finally, it turned out to be that demonetisation started to reap its benefits to the nation. Naturally the apologists of demonetisation, started to cheer again after a long gap and these news are widely shared over the social media. But the fact-checker in me became curious with this claim of 24% jump in the number of returns filed. The figure of “2.82 crore returns filed in this assessment year” does not look so huge because I have delved into these data 3 months back for doing an article “Why Duplicate PAN Cards Are Not as Big an Issue as the Modi Government Claims” . Numbers used to stay in my mind, so it ca...