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Last Updated : Aug 23, 2019 01:29 PM IST | Source: Moneycontrol.com

IMF questions India's tax revenue esimates: Report

Growth projections for India have been cut due to the pervasive economic slowdown across segments (consumer durables, auto, and biscuits) and officials are not confident of achieving the target.

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The International Monetary Fund (IMF) has raised doubts over India's steep tax revenue collection estimates for 2019-20, according to a report in Business Standard.

Moneycontrol could not independently verify the report.

IMF monitors countries economy annually and sends economists to meet with policymakers in government and the central bank, in accordance with Article IV of its agreement with countries.

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This is done to assess and put together a report that identifies weaknesses that could lead to financial and economic instability. India has to respond to the IMF this week.

The questions came after the country's direct and indirect tax collections for FY18-19 fell short by Rs 1.7 trillion, which was 7.5 percent below the revised estimate for the period.

Budget 2019 cut tax projections from the Interim Budget, despite revenues expected to growth by 25 percent year-on-year. The direct tax collected till mid-August is 4.69 percent, against the annual target of 17.3 percent.

"Across the board, the economic slowdown will affect tax collection, which is already projected to be unreasonably high," the publication quoted a government official.

Growth projections for India have been cut due to the pervasive economic slowdown across segments (consumer durables, auto, and biscuits) and officials are not confident of achieving the target.

RBI's monetary policy review cut growth projections for FY19-20 growth by 0.1 percent to 6.9 percent.

The IMF cut its India growth outlook by 30 basis points for the current and next fiscals to 7 percent and 7.2 percent respectively, and Asian Development Bank cut growth forecast to 7 percent.

"Broad sentiments suggest economic growth may be lower, between 10 percent and 11 percent. This will mean direct tax collection will be 12-13 percent," a senior government official told the paper.

IMF's earlier country report for India had pegged growth at 7.3 percent for FY18-19, which turned out to be much lower at 6.8 percent.

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First Published on Aug 23, 2019 01:27 pm
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