Reality check on tax growth

The record rise in tax collections in 2021-22 should be judged in a larger context

The Narendra Modi government’s gross tax collections in the just-concluded financial year of 2021-22 have recorded a 34 per cent jump to a record high of Rs 27 trillion. An annual increase of this order has not been seen in at least the last four decades. The size of the Indian economy, or the gross domestic product (GDP) grew by about 19 per cent in nominal terms in 2021-22. So, the extent of the rise in the Centre’s gross tax collections is significant and has understandably triggered celebration within and outside the government. But it is also important to evaluate