Introduction: In response to an unstarred question in the Rajya Sabha, this article delves into the significant growth observed in the gross total income of individuals across various income groups in India from 2018 to 2023. The analysis also explores the correlation between this growth and the increase in net direct tax collections, shedding light on the government’s utilization of these funds for public welfare and developmental initiatives.
Detailed Analysis:
(a) Growth in Gross Total Income (2018-2023): As per income tax return data, there has been robust growth in the gross total income of individual taxpayers from Assessment Year 2018-19 to Assessment Year 2021-22. The figures, presented in Annexure A, showcase a consistent increase across different income groups, emphasizing the positive economic trajectory.
(b) Impact on Net Direct Tax Collections (2018-2023): The impact of this income growth is reflected in the substantial increase in net direct tax collections, rising from Rs. 10.03 lakh crores in F.Y. 2017-18 to Rs. 16.63 lakh crores in F.Y. 2022-23. The year-wise details highlight a progressive trend, indicating a strong correlation between individual income growth and tax revenue.
(c) Utilization of Tax Collections for Public Welfare: The government’s approach to balancing expenditure requirements is evident in its allocation of funds in the interest of the general public. Notably, the government has adopted a pragmatic strategy by enhancing capital spending and reprioritizing revenue.
Recent initiatives, such as the Pradhan Mantri Garib Kalyan Anna Yojana and the increased subsidy under the Pradhan Mantri Ujjwala Yojana, reflect the government’s commitment to supporting vulnerable sections and ensuring macroeconomic stability.
Furthermore, the government has increased spending on social services, with a focus on citizens’ well-being. The share of expenditure on social services has seen an upward trajectory, reaching 26.6% in FY23 (BE), indicating a commitment to holistic development.
The emphasis on enhancing productive domestic capital expenditure, with a substantial increase from ₹4.1 lakh crore in 2020-21 to ₹10 lakh crore in 2023-24 (BE), signals a proactive approach to boost investments and generate job-oriented economic growth.
Conclusion: In conclusion, the analysis underscores the positive trends in individual income growth, leading to a substantial increase in net direct tax collections. The government’s prudent allocation of these funds towards public welfare and developmental projects, especially during challenging times like the pandemic, reflects a commitment to inclusive growth and socioeconomic well-being. As India continues on this trajectory, the balance between economic expansion and social welfare remains a key aspect of sustainable development.
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GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO. 1811
TO BE ANSWERED ON TUESDAY THE 19TH DECEMBER, 2023/ AGRAHAYANA 28, 1945 (SAKA)
Growth in the gross total income of individuals across different income groups
1811.SHRI B. LINGAIAH YADAV:
Will the Minister of FINANCE be pleased to state:
(a) whether there is a robust growth in the gross total income of individuals across different income groups since 2018 onwards, if so, the details thereof, year-wise; and
(b) whether this has been reflected in the increase in Net Direct tax collections since 2018, if so, the details thereof, year-wise; and
(c) how Government is using such tax collection and for what purpose particularly in the interests of the general public and its related projects?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) As per the income tax return data, there is a robust growth in the gross total income of individual taxpayers across different income groups from Assessment Year 2018-19 to Assessment Year 2021-22 and the same is at Annexure A.
(b) The overall impact has been reflected in increase in net direct tax collections from Rs. 10.03 lakh crores in F.Y. 2017-18 to Rs. 16.64 lakh crores in F.Y. 2022-23. The year-wise details of net direct tax collections are as under:
(Rs. in Crores)
| Financial Year | Net Direct Tax Collection |
| FY 2017-18 | 10,02,738 |
| FY 2018-19 | 11,37,718 |
| FY 2019-20 | 10,50,681 |
| FY 2020-21 | 9,47,176 |
| FY 2021-22 | 14,12,422 |
| FY 2022-23# | 16,63,686 |
Source: Pr. CCA (CBDT)
# Provisional
(c) Government has carefully balanced expenditure requirements and have allocated expenditure in the interest of general public and the development needs of the country. In recent years, the Government has adopted a pragmatic approach of improving the quality of expenditure by enhancing the capital spending and re-prioritising revenue To provide support to the vulnerable sections of society during the pandemic and the sudden outbreak of the geopolitical conflict, the Government enhanced the food and fertiliser subsidy requirement to support the people and ensure macroeconomic stability.
To further ensure food security, the new Integrated Food Security Scheme named Pradhan Mantri Garib Kalyan Anna Yojana has been launched to provide free food grains to Antyodaya Anna Yojana and Primary Household beneficiaries for a period of five years with effect from 1st January 2024. In October 2023, the Government also increased the subsidy under the Pradhan Mantri Ujjwala Yojana from ₹200 to ₹300 per 14.2 kg cylinder.
The Government has also enhanced its spending on various social services1 with a focus on many aspects of the social well-being of citizens of the country. The share of expenditure on social services in the total expenditure of the Government has been around 25 per cent during FY18 to FY20. It increased to 26.6 per cent in FY23 (BE).
In addition to ensuring the basic safety nets for the vulnerable, the Government has emphasised on enhancing productive domestic capital expenditure. The central government capital expenditure has increased from ₹4.1 lakh crore in 2020-21 to ₹10 lakh crore in 2023-24 (BE). The capital expenditure will give a boost to investments in the country and help generating job-oriented economic growth.
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Annexure A
Gross total income of Individual taxpayers across different income groups from A.Y. 2018-19 to A.Y. 2021-22
|
Assessment Year |
2018-19 | 2019-20 | 2020-21 | 2021-22 |
| Range (in INR) | Sum of Gross Total Income (In Crore INR) | Sum of Gross Total Income (In Crore INR) | Sum of Gross Total Income (In Crore INR) | Sum of Gross Total Income (In Crore INR) |
| >0 and <=10,00,000 | 21,14,001 | 23,62,048 | 24,44,466 | 26,06,265 |
| >10,00,000 and <=25,00,000 | 6,43,521 | 7,54,600 | 8,43,254 | 9,21,062 |
| >25,00,000 | 6,57,375 | 7,97,651 | 8,59,414 | 9,33,736 |
| Total | 34,14,897 | 39,14,300 | 41,47,135 | 44,61,063 |
| Notes –
1. Gross Total Income is the income before chapter VI-A deduction as computed in the “Computation of total income” schedule of return of income. 2. The “Sum of Gross Total Income” is the sum of Gross Total Income of all returns within the value range slab. Source: Income Tax Return Statistics as available on the Income Tax website |
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Notes:
1 Social services include education, sports, art, and culture; medical and public health, family welfare;
water supply and sanitation; housing; urban development; the welfare of SCs, STs and OBCs, labour and labour welfare; social security and welfare, nutrition, relief on account of natural calamities, etc.
