SBI economists urge govt to settle all pending litigation for revenues
State Bank of India (SBI) economists have recommended the government to come up with a tax holiday budget, with carefully crafted policies for immediate fiscal lubrication. Economists have urged the government to settle the cases under tax litigation once and for all to raise resources instead of announcing new taxes. Around Rs.9.5 trillion is stuck in disputes as per data available till the end of fiscal 2018-19. The amount under litigation includes Rs.4.1 trillion in corporation tax, Rs.4 trillion stuck in income tax cases and another Rs 1.5 trillion crore on account of commodities and services tax. From a fiscal position perspective, the economists said that the combined fiscal deficit of the Centre and states will rise to 12.1 per cent of GDP in 2020-21, with the Centre’s alone at 7.4 per cent of the GDP. For 2021-22, they expect the government to target to get down the fiscal deficit to 5.2 per cent in the Budget, assuming that the expenditure growth is curtailed at six per cent and a 25 per cent jump in receipts.