Rising excise, customs revenue shows hope of light
November, 18th 2009
Rise in centres excise duty collection gives signals for economic pick-up. Excise collection has shown a 4% increase from Rs. 8591 crore in September 2009 to Rs. 8952 crore in October 2009. The excise duty collections had shown positive growth movement from July 2009. The collection of October 2009 was still substantially lower than the Rs 9,740 crore collected a year back.
In case of Customs duty, there has been an improvement in collection in October 2009 than the previous month as the figure rose from Rs 6654 crore to Rs 7,505 crore. Customs duty collections in October 2008 stood at Rs 9,265 crore.
The Finance Minister, Mr Pranab Mukherjee, expected an enhancement in indirect tax collection receipts in the third quarter (October-December 2009) on the back of improved industrial activity and higher domestic demand.
The excise duty revenues of the Centre decreased 18.8% on a year-on-year basis in the period April-October 2009.
The global economic recession and consequent fall in imports have badly affected customs duty collections, which declined 31.8% in April-October 2009 on a year-on-year basis.
The excise duty collections till October 2009 represented around 50% of the budget estimate of Rs 1,05,000 crore for 2009-10. In the case of Customs duty, 46% of the budget estimate of Rs 98,000 crore has been achieved till October.
Policymakers are in the view that it would be difficult for India to increase its merchandise exports and return to the9 % GDP growth levels in the next few years unless there is a rise in the economic activity in the developed markets such as the US and the EU.
The Government has suggested that the fiscal stimulus given in December 2008 and in early 2009 would be wound down in 2010, which will help to increase the Centres indirect tax revenues through increased tax rates.