Mount honest attempts to settle litigation for revenues in FY22, avoid new taxes in Budget: SBI report

Mumbai: SBI economists have pitched for avoiding new taxes and urged the government to settle past litigations.

“There must not be any new taxes in the Budget. Let us have a tax holiday budget, with carefully crafted policies for immediate fiscal lubrication. A gamechanger in the budget could be an honest attempt to settle cases under tax litigation,” they said.

The amount under litigation includes Rs 4.05 lakh crore in corporation tax, Rs 3.97 lakh crore stuck in income tax cases and another Rs 1.54 lakh crore on account of commodities and services tax, it said.

They said some tax incentive for savings is an essential action for senior citizens.

The combined fiscal deficit of Centre and states will go to 12.1 percent of GDP in FY21, with the Centre’s alone at 7.4 percent of GDP, it said.

It pegged the overall disinvestment proceeds to be budgeted at Rs 2 lakh crore.

On GST shortfall, it said payables to states from Centre will narrow down to Rs 25,000 crore.

On reports suggesting the government is thinking of a Keynesian approach, SBI economists backed the plan.

It also recommended government to reduce ownership in PSBs to 51 percent.