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MANUFACTURING AND SERVICES SECTORS KEEP GOVERNMENT’S TAX REVENUES BUOYANT
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Robust economic growth and improved performance of the manufacturing and services sectors have helped the government keep tax revenues buoyant during the last five years, says Economic survey – 2007-08. Average annual growth of revenue receipts of the Central Government between 2003-04 and 2007-08 (BE) was 16.2%. Improved growth of tax revenue at 20.7% during the same period generated an overall high growth of revenue receipt. Gross tax revenue of the government recorded an average annual growth of 20.5%, higher than the 13.8% rate of growth of GDP (at market prices) during this period. The Survey further states that the gross tax GDP ratio, which had stagnated at 8-10% for more than a decade, increased to 11.4% in 2006-07 and is expected to improve further to 11.8% in 2007-08 (BE).
The Economic Survey, however, points out that the Revenue Expenditure in 2006-07 (actual) grew by 17% and was higher than the budgeted expenditure by 5.4%. Capital expenditure on the other hand recorded a moderate growth of 3.6% and was lower than the budgeted expenditure by 9.3%.
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