It is now clear that the government is set to miss its direct tax collection target for the current fiscal by a wide margin.
As per the Income-Tax department data, the direct tax mop-up until January has grown by a mere 9.28% to R3.46 lakh crore, well below 19% growth required to take the collection for the full fiscal to the budgeted level of R5.32 lakh crore for 2011-12.
This means the finance ministry has to mobilise up to R1.86 lakh crore to achieve the target in the last two months of the fiscal, an uphill, if not impossible, task.
?Looking at the trend, we would be lucky if the collection for the fiscal touches R5 lakh crore,” an official said. The direct tax collection has to grow over 45% in the remaining two months to achieve the budget estimate.
The muted collection so far is due to low growth in corporate tax and refunds of R78,315 crore that was higher than that refunds in the same period last year. During April-January, corporate tax collection rose by just 5% to R2.27 lakh crore, while personal income tax collection grew 18.38% to R1.18 lakh crore.
The weak markets have also affected the collection from securities transaction tax (STT). The mop-up from STT has declined 27% to R4,145 crore during April-January this fiscal.
India’s economy recorded just 6.9% growth in the second quarter ending September for the current fiscal, slowest in more than two years. Signaling troubled times ahead, growth fell sharply in comparison to 7.7% expansion logged in the April-June quarter of the current fiscal and 8.4% registered in the second quarter a year ago.
The indirect tax collection during April-December
this fiscal was up 16% at R2.85 lakh crore as compared to the corresponding period last fiscal.