Gross tax revenue witnessed growth of 14% in April-October: RBI

The fundamentals of the Indian economy remained robust during 2023-2024, the Reserve Bank of India (RBI) said RBI in its latest financial stability report. The RBI in its latest report said that the gross tax revenue recorded a growth of 14 per cent in the first seven months of the current financial year, with direct taxes registering an annual growth of 23.9 per cent.

“Increased compliance, higher advance tax collections, and the widening of the tax base have contributed to the robust growth in tax revenue. Indirect taxes recorded a growth of 3.6 per cent, as growth in goods and services tax (GST) and customs revenues outweighed the contraction in excise duties,” the central bank said.  

The growth in indirect tax collection is visible from the fact that the average monthly GST collection increased in April-November 2023-24 to Rs 1.67 lakh crore as compared with 1.49 lakh crore during the same period last year.

In addition to robust tax collection, the quality of expenditure has shown a marked improvement, RBI mentioned.

The quality of expenditure has shown a marked improvement - capital outlay excluding loans and advances is projected to increase to 2.8 per cent of gross domestic product (GDP) in 2023-24.

“During April-October 2023-24, capital outlay increased by 28.6 per cent annually and helped reduce the revenue expenditure to capital outlay (RECO) ratio to 3.9 from 4.8 during April-October 2022-23,” the report stated. Throwing light on the debt-to-GDP ratio, the RBI said that the central government’s debt-to-GDP ratio is projected to fall from 62.8 per cent in 2020-2021 to 57.4 per cent in 2023-24.  “Meanwhile, the debt service burden is estimated to remain high,” RBI added.