India Insight

(Any opinions expressed here are those of the author and not necessarily of Thomson Reuters)

Finance Minister P. Chidambaram’s drive to shore up government coffers is not just giving businessmen sleepless nights.

Just when reporters were taking a breather after filing stories based on inflation data on Thursday, the finance ministry sent them text messages about a press briefing. The recipients were supposed to rush to Chidambaram’s office in 15 minutes to cover what appeared to be a major policy announcement. After all, the finance minister doesn’t call on such short notice for chitchat.

As they raced through Delhi traffic and crossed the security cordon, many journalists were already thinking of the headlines they would write after the press briefing. With barely two weeks to go before the financial year ends, Chidambaram is racing to meet fiscal targets that will affect the country’s deficit, debt rating and more. Any slip would dent his credibility – and he is determined to collect every penny.

Thousands of tax notices are dispatched every week to scores of defaulters in a country of 1.2 billion people in which less than 3 percent of the population pays tax. Chidambaram estimates 73,388 taxpayers have defaulted on such payments, costing the government nearly 39 billion rupees ($719 million) in the current financial year.

(Any opinions expressed here are those of the author and not of Reuters)

The countdown to Budget 2013 has begun, and Finance Minister P. Chidambaram must try to keep India’s fiscal deficit from gaining weight.

One idea we’re hearing a lot lately is turning to India’s super-rich citizens to boost tax revenue and improve the tax-to-GDP ratio. In a television interview aired in January, Chidambaram’s comments on the subject didn’t reveal much, but led to media speculation over higher taxes for the well heeled.

It’s a step that may lead the Harvard-educated lawyer down a path that John Morton took more than 500 years ago. The 15th-century lord chancellor in the court of the English King Henry VII, not to mention former archbishop of Canterbury, is traditionally credited with “Morton’s fork”, a taxation principle that ensnares the rich and poor alike.

Days before Finance Minister P. Chidambaram unveils India’s budget for the next financial year, the online team at Reuters India conducted an informal survey of more than 200 people to learn what they expect from the 2013 budget.

In a poll conducted between Feb. 8 and Feb. 20, we asked 10 questions on issues ranging from India’s fiscal deficit to income taxes. At the time of publication, 205 respondents had shared their thoughts about India’s biggest business and economic event of the year.

Not everyone is confident that Chidambaram, already credited with saving the country from economic ruin once, will deliver. Forty-four percent of the respondents said that the budget will be geared toward pleasing voters, while 17 percent thought that it would contain harsh measures to help fix the nation’s economic problems. Thirty-nine percent thought that Chidambaram would find a balance.