'FY'13 to be turnaround year for economy'

Pranab Mukherjee asks tax officials to work "relentlessly" to improve tax collection

PTI | June 11, 2012



Dismissing concerns that India's growth rate may drop below 6.5 per cent, finance minister Pranab Mukherjee on Monday said 2012-13 would be the turnaround year for the economy.

Addressing a conference of top officials of the income tax department, he said steps are being taken to put India back on path of high economic growth.

"We are taking all necessary steps to ensure that we come back to the path of the targeted GDP growth. Of course it will take some time.But from this year we expect to make a turn around," Mukherjee said.

In the Budget 2012-13, the government had pegged 2012-13 GDP growth at 7.6 per cent (plus, minus 0.25 per cent).

Following a "disappointing" economic growth of nine-year low of 6.5 per cent in 2011-12, there have been concerns that India's expansion rate this fiscal may slip further.

Mukherjee said that after the 2008 economic crisis, the GDP growth slipped to 6.7 per cent in 2008-09, but bounced back to 8.4 per cent in the following two financial years.

Highlighting the positives in the economy, Mukherjee said interest rate cycle has been reversed and there is growth in mining sector, turnaround in investment growth rate and there are predictions of normal monsoon, besides decline in crude oil prices.

"All these factors should help in recovery of domestic growth momentum," he added.

On direct tax collection target of Rs 5.70 lakh crore for the current fiscal, he said it was achievable.

"I do feel this target is moderate and can be achieved," he said while asking the tax officials to work "relentlessly" to improve tax collection.

In 2011-12, the direct collection at 4.95 lakh crore was marginally down from the revised target of 5.05 lakh crore.

Amid undeclared assets held by Indians abroad being a matter of "intense debate recently", Mukherjee said that to encourage and facilitate real time exchange of information on cross-border transactions with other jurisdictions, India has set up 8 more Income Tax Overseas Units (ITOUs).

After a comprehensive review of the existing network, steps are being taken to augment the reach of the ITOUs in more jurisdictions, he added.

Enlarged network of ITOUs, with an enabling legislative framework in the form of Double Taxation Avoidance Agreement (DTAA) and Tax Information Exchange Agreement (TIEAS), will help in receiving valuable information in future, he said.

On promoting voluntary compliance of tax laws and role of children, Mukherjee said there was a need to educate them on the importance of taxes for the nation building process.

He said the I-T Department has partnered with NCERT to introduce information in this regard in school textbooks.

He, however, expressed concern over rising litigation with tax payers and amount locked up in appeals before CIT (A), ITAT and different courts.

A whopping over Rs 4.36 lakh crore was locked in about 2.59 lakh cases as on December 31, 2011.

The main reason for pendency of cases before CIT (A), he said, appears to be slower disposal rate vis-a-vis the pace of cases being filed. On an average, it takes about one and half years to dispose of a case.

"The Department needs to ensure that after proposed cadre restructuring sufficient manpower is deployed to reduce the time taken for disposal of appeals and that it is not more than six months" he added.

Mukherjee said he has been directing the I-T Department to reduce all avoidable litigation with the taxpayers as well as with employees.

"I have also asked CBDT (Central Board of Direct Taxes)to ensure that no charge sheets are filed on the last date of retirement," Mukherjee said.

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