India Direct tax mopup rises 19% in H1

Thursday, 21 October 2010 02:28 - - {{hitsCtrl.values.hits}}

NEW DELHI: Direct tax collections rose 19% in the six months to September , increasing the chances of the government raising the budgeted Rs 4,30,000 crore for the entire fiscal year and ending with a lower-than-budgeted fiscal deficit.

The government managed to raise Rs 1,81,758 crore during the period, up from Rs 1,52,625 crore in the year-ago period. It has already reduced the borrowing estimates for the current year by Rs 10,000 crore in the schedule unveiled last month. With Indian Oil Corporationexpected to hit the market later this year, the government looks comfortably placed to raise the budgeted Rs 40,000 crore from stake sales in public sector firms.

Indirect tax collections were even better with strong imports growth and near double-digit manufacturing growth driving customs and excise collections. The indirect tax mop-up was 44.4% higher during April-September period.

Although the government spent the bulk of Rs 65,000 crore higher earnings from the auction of 3G and broadband spectrum to meet the Rs 54,000 crore surplus expenditure proposed in the second supplementary grant, there is still some cushion available.

The government has budgeted a fiscal deficit target of 5.5% of the gross domestic product in the current year, but is expected to reduce it to 5%. Fiscal deficit is the excess government expenditure over its revenues, which has to be met through borrowings.

The overall tax collections were up 31% in the first six months at Rs 3,34,000 crore against a budgeted Rs 7,47,000 crore for the entire fiscal year, an increase of 18% from last year.