Budget 2023 – Impact 6: How does the Government spend my taxes?

Where are my taxes going? City roads are bad, and the highways have overcharged tolls. No new bridges are seen. From water to railways, everything is charged. I am unable to find where my taxes are spent! Are you one of those citizens wondering about this? If so, here is the answer.

The Government is expecting Rs.9,00,000 Crores of income tax for FY2023-24 from individual taxpayers like salaried employees, pensioners, etc.

How much do the companies pay in taxes? They also pay a little over Rs.9,00,000 Crore as income tax (income tax paid by companies and businesses is also called a corporate tax)

The Central Government’s share of GST is Rs.9,56,000 Crores, and Excise Duty on oil like petrol and diesel is around Rs.3,40,000 Crores. Customs duty is charged on the import of goods, which is around Rs.2,30,000 Crores.

All in all, the Government will collect Rs.33,60,858 Crores of taxes in the next fiscal year.

Loan or Debt has been taken by the Government of India

Like you and me, the Government of India also takes a loan. The total loan as it stands today is Rs.1,69,46,666 Crores. On this amount, the Government has to pay interest of Rs.10,80,000 Crores per year. Considering the 140 Crore population, each of us has a loan of Rs.1,21,000 on our head.

So, friends, to answer your question – where are my takes going? All the income tax we pay is going towards interest payment on the loan taken by the Government.

What about the salary, pension, etc., of government employees? They are all called Establishment expenditures; for the year, it works out to Rs.7,45,000 Crore.

This means Income tax paid by Individuals and corporates together are going towards interest on loans and payment of salary, pension, etc.

If all the tax money is used for the above expenses, how will the government source funds for developmental activities?

The Government will borrow (take more loan) over Rs.17,00,000 Crores. Out of this, they will spend Rs.10,00,000 Crores for public infrastructure and around Rs.3,75,000 Crores for the subsidy of fertilizers, food, etc., and the rest in various other schemes.

In a nutshell, the Government needs a lot of money to meet the regular expenses and is always short for developmental activities. Having said that, India is much better positioned compared to our neighbouring countries, which are struggling to survive!

India is in a growth phase; we will do better over the next few years.

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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 25+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional and Registered Valuer (F&SA).Prasad welcomes your comments and questions. Please email him at simplifiedlaws20@gmail.com

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