Budget 2013: How tax rates & budgets of other emerging economies compare

Why Finance Minister faces a tough task?

India’s huge dependence on fuel imports is what differentiates it from most other emerging market economies. The country has to shell out subsidies to keep prices low.

Probably that’s why, with the exception of China, India’s taxes are a shade higher than those in most countries. And that would make the revenue-raising job of finance minister P Chidambaram more difficult in the coming budget. A cross-country comparison:


Budget highlights of emerging economies:

The Brazil government is willing to relax its fiscal discipline (enjoys primary surplus) to prioritise economic growth in 2013.

China’s budget deficit will increase to about 2% of GDP in 2013 from the targeted 1.5% in 2012 as the government has been boosting spending on infrastructure to support growth.

Indonesia’s 2013 budget (deficit 1.6% of GDP) has paved the way for an increase in fuel prices, which are heavily subsidised.

The Philippines has planned for a substantial hike in 2013 budget (deficit 2% of GDP) to fund infrastructure, a move aimed at jump-starting growth.

Russia’s 2013 budget (deficit 0.8% of GDP) backs tighter fiscal rules aimed at controlling spending.