New Delhi. In India, 50 percent of the poor people pay 64.3 percent of GST. This claim was made in a report by Oxfam. This was stated in Oxfam’s report “Survival of the Richest: The India Story” and it was released at the World Economic Forum in 2023. Regarding this claim, economist Dr. Vidhu Shekhar has published an article in which he has refuted it.
In a recent article published in The New Indian Express, he said that the Oxfam report claimed that 64.3 per cent of India’s GST is paid by the poorest 50 per cent, while the country’s richest 10 per cent pay only 3-4 per cent. Contribute percentage. This claim became widely discussed in the media and was raised in many policy discussions, it was even presented in the form of questions in Parliament. But, are these figures correct? After searching for the answer to this question, it was found that this report of Oxfam is beyond the facts and there are serious flaws in its methodology.
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Shortcomings of Oxfam report
The manner in which the data was presented in the Oxfam report does not appear credible upon closer examination. GST is an indirect tax based on consumption, meaning people who spend more pay more GST. This means that people with higher income pay more taxes. But Oxfam’s report contradicts this general economic theory.
The data cited in the report were limited to just two tables, and did not contain any clear calculations or how to perform those calculations to verify their claims. The report also said that they focused on selected food and non-food items, but did not explain how and why these items were selected. This amounts to selective use of data, which makes any conclusion questionable.
Actual GST figures
According to Vidhu Shekhar, to accurately verify the Oxfam report, he thoroughly analyzed NSSO’s latest consumer data for 2022-23 and applied accurate GST rates on more than 400 items. The findings that followed completely rejected Oxfam’s claims.
According to their calculations, domestic GST collection in 2022-23 was Rs 6.19 lakh crore, which is 34 percent of the total GST revenue. The rest of GST comes from trade and government consumption. This figure is in sharp contrast to Oxfam’s claim that people from the poor contribute 64 percent of GST. Only 28 percent of domestic GST and 9.6 percent of total GST are paid by the bottom 50 percent of the population, while the richest 10 percent contribute 26.63 percent of domestic GST and 14.2 percent of total GST.
Tags: business news, gst news
FIRST PUBLISHED: October 9, 2024, 23:07 IST