There were further signs of economic revival following the release of data on Wednesday that showed indirect tax receipts, domestic steel consumption and bank credit on the rise. The finance ministry said initial reports on tax collections point to an industrial recovery, although confirmation of the trend would be available only after two or three months.
?Customs collections for the first quarter of (the) current fiscal are at Rs 17,858 crore. In the January-March period, collections were at Rs 16,766 crore. This is a signal that the manufacturing sector will improve,? said Central Board of Excise & Customs chairman PC Jha.
Improved tax collections would help contain the government?s borrowing programme for the fiscal, now estimated at Rs 4.51 lakh crore. The Centre is expected to finalise its revised borrowing calendar for this quarter at Thursday?s meeting of the debt & cash management group, comprising senior RBI and finance ministry officials.
The government will continue raising around Rs 15,000 crore from the market every week, finance secretary Ashok Chawla said, enabling it to meet most of its requirements in the first half of the fiscal, thereby leaving room for private borrowers in the second half.
Meanwhile, data released by the steel ministry indicates that steel consumption rose 5.2% in the April-June quarter to 12.83 million tonne from 12.2 mt a year earlier. ?Production of finished steel went up by 3.4% to 13.98 mt in April-June,? an official release stated. International demand for the metal, however, is yet to recover with exports declining 37.8% in the quarter.
In another welcome sign, RBI said credit growth picked up marginally to 16.34%, or Rs 3,93,149 crore, for the fortnight ended July 3, against 15.75% in the previous two weeks. Bank loans rose by Rs 28,532 crore, taking outstanding advances in the banking system to Rs 27,98,747 crore.
Finance minister Pranab Mukherjee in his reply to the debate on the Budget in the Rajya Sabha reiterated the administration?s view that steps taken by the government from late 2008 are now yielding results. The Centre expects the economy to grow at around 7% this fiscal, although Mukherjee said he aimed to return to a higher growth path asap.