Page 26 - Nuvama | IC Report 2023

• DE-GLOBALISATION • DEREGULATION • DEBT • DEMOGRAPHY • DEMOCRACY

18
16
Exhibit 3: 16
India’s tax
collections have 14 12
been buoyant 12 12
(%, CAGR) 10 9
post-covid
8
6
4
2
0
FY10-20 FY20-22
Central government gross tax revenue growth Nominal GDP growth
Source: CMIE, Nuvama Research

Spending efficiency: A substantial uptick

Alongside GST, which has boosted the government’s ability to collect taxes, India has made dedicated
efforts to enhance spending efficiency. In the past, income transfers were a multi-tiered process
before the funds could reach beneficiaries; this in turn led to large leakages. With the government
harnessing technology, leakages due to operating inefficiencies have reduced dramatically.

Exhibit 4:
Direct benefit 7
transfers have
risen, thereby 6
reducing leakages
5
(INR Trn) 4

3
2

1
0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Direct benefit fund transfers (INR trillion)
Source: DBT Bharat, Nuvama Research

To this end, the government mapped citizens’ identity using biometric identity—Aadhaar. It then
linked the identity numbers to respective bank accounts. Hence, a large part of income transfers now
happens directly to beneficiaries’ bank accounts, thereby eliminating the middleman. This has led to
boosted spending efficiency and has, thus, resulted in greater benefits even with lower allocations.

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