The BJP-led Centre is reportedly mulling the passing of a new coronavirus cess or surcharge for the high-income brackets. According to a report by the leading newspaper, the surcharge is likely to be implemented in the next budget session alongside other changes including a hike in the long-term capital gains tax, as well as increased rates on the sale of property for owners of more than two houses and many more.
The corona cess is likely to invite the wrath of the Indian industries, claim financial analysts. The industrialists had earlier asked the government not to introduce more tax burdens on them since they are already hard-hit by the Covid-19 pandemic. At the same time, the Covid-induced pandemic has also severely affected the Indian economy. However, government officials are indicating that the Covid cess is only under consideration.
While the nation and its financial planners are hoping for a V-shaped recovery, the official reports still indicate a contraction in the economy. According to top reports, India’s GDP is estimated to contract by 7.7% in the 2020-21 fiscal. This is also agreeing with reports from the National Statistical Office who released similar numbers citing the damage dealt by the Covid-19. Moreover, the vaccine rollout is also estimated to cost around Rs 65,000 crore to the exchequer, but Prime Minister Narendra Modi had already declared that they are taking care of costs for only phase 1 of the vaccination drive. While the Reserve Bank of India projects a 7.5% contraction in the economy, these are conservative numbers when considering other estimates. The International Monetary Fund (IMF) reports a 10.3% contraction while the World Bank has an estimated 9.6% respectively.