Tax cuts of Rs 8.7 trillion.

"Gross GST (goods and services tax) collections grew 9.1% to about Rs 1.84 trillion in February." GST collections in January increased 12.3% year-on-year to Rs 1.96 trillion and 7.3% in December to Rs 1.77 trillion. ET. Collections increased from Rs 215.72 billion in July 2017 to an all-time high of Rs 2.10 trillion in April 2024. wikipedia. This is due to more efficient collections, bringing more companies into GST net and a doubling of average annual inflation from 3.3% in 2017 to 6.7% in 2022 (RI) and, though the average annual rise of inflation fell to 5.7% in 2023 and 4.9% in 2024, GST continues to hit record numbers because inflation  compounds year to year. However, the government has  reduced income tax rates for individuals. "Individuals and HUFs (Hindu undivided families) got cumulative rebates worth Rs 8.7 trillion, compared with Rs 4.5 trillion of corporate tax incentives," over the past five years to 2024. ET. As ever, information about the government is never complete in India. Because even as the government was reducing income tax rates by tiny increments (incometax.gov.in), it was clawing back massive amounts from capital gains. Tax on long term capital gains (LTCG) has been increased from 10%-12.5% but the real damage comes from the removal of inflation indexation (Bajaj) because India always runs a very high rate of inflation. Tax rate for short term capital gains (STCG) has been increased from 15%-20%. Bajaj. But, sleight of hand has consequences, however cunning it may be. Foreign investors (FIIs) have been dumping Indian stocks because "In USD terms, foreigners have made virtually ZERO returns in the last 3 years and a paltry 7.8% in the last 5. Their stance to sell is not wrong from their perspective," said Alok Jain, founder of Weekend Investing. In 2020, one US dollar bought Rs 74.31. The rupee had fallen to 83.28 by May of 2024. worldtradescanner. com. The dollar is trading at Rs 87.36 this morning. xe.com. That is a fall of 17.56% in just five years. So, after paying STCG at 12.5% and losing 17.56% in converting rupees to dollars, FIIs have gained nothing in 5 years. After hitting an all-time high of 85,978.35 in September 2024 (FE), the S&P BSE Sensex is down to around 72,950 this morning. As FIIs buy dollars for repatriation the rupee falls. India's foreign exchange reserves "declined from an all-time high of nearly $705 billion in late September to $640 billion." In addition, "The RBI's net short dollar position in forwards and futures hit a record high of $77.5 billion in January 2025." "The data is released with a one-month lag." Reuters. The dollar short sales will have to be deducted from RBI's reserves in the future. The RBI has been indulging in gymnastics to defend the rupee. A weaker rupee increases prices of imports and adds to inflation. Higher inflation compared to the US depreciates the rupee. Tax cuts should be genuine. Fake cuts get fake results.