The share of States in taxes grew by 25.2% during April-November 2017, much higher than the growth in net tax revenue (to centre), which is what the Centre has at its disposal to spend from its own taxes.
Disinvestment proceeds and non-tax revenues have shown contrasting growth patterns, the former reinforcing the revenue position and the latter dampening it.
The growth in direct tax collections of the Centre kept pace with the previous year.
The indirect tax collections in the previous two years were buoyed by mobilization of additional resources (ARM), prudently apportioning the petroleum price advantage into pass-through to the consumers and raising of development funds.
Salient Measures under Indirect Taxes During 2017-18
Customs Duty changes to incentivize ‘Make in India’
Basic Customs Duty was reduced on inputs and raw materials.
Basic Customs Duty was increased on specified goods manufactured indigenously in significant quantity.
Export Duty of 15% was imposed on other aluminium ores, including laterite.
Rollout of GST
In a historic tax reform, the goods and services tax was rolled out on 1st July, 2017, subsuming almost all major indirect taxes like Central Excise Duty, Service Tax, VAT, CST, entertainment tax, Octroi, luxury tax, a large number of cesses/surcharges and various other state and central levies on goods and services.
Policy Initiatives on Investment in CPSEs
The thrust of the Government is presently directed towards efficient management of its investment in CPSEs (Central Public Sector Enterprises), with the overall focus on higher economic growth through consistent long-term policies as well as efficient and effective allocation of resources.
Based on this philosophy, Budget 2016-17 focused on the need to migrate from the ‘disinvestment-based approach’ to ‘investment-based approach’ for CPSEs.
Accordingly, renaming the Department as ‘DIPAM’ with expanded mandate denotes a paradigm shift in the thinking process of the Government on its strategy to manage its investment in CPSEs.
As announced, the Department also laid down comprehensive guidelines on “Capital Restructuring of CPSEs:” in May, 2016 for efficient management of Government’s investment in CPSEs by addressing various aspects, such as, payment of dividend, buyback of shares, issues of bonus shares and splitting of shares.
The commitment for time-bound listing of CPSEs has been taken on-board as an integral part of the reforms initiatives of the Government by making an announcement to this effect in the Budget 2017-18.
Pursuant to the announcement, the Government put in place a mechanism/procedure along with indicative timeless for listing of CPSEs on 17th February, 2017.
All Ministries/Departments have been requested to follow the suggested timeless, aimed at time-bound listing of identified CPSEs as per the extant Act, Rules and Regulations.
In line with the budget announcement, the Government also approved listing of 14 CPSEs (including 2 insurance companies) on the stock exchanges.
During the current financial year, 4 IPO issues of Housing and Urban Development Corporation (HUDCO), Cochin Shipyard Ltd. (CSL), General Insurance Corporation and New India Assurance Company Ltd have been successfully listed on the stock exchange.
