Drawing comfort from resilience in the economy , the government said it is confident of achieving the direct tax collection target for the current financial year.
Direct taxes have risen nearly 18% to Rs 2.16 lakh crore in April- November 2010-11 from a year ago. As things stand now, we will definitely reach the target, said S S N Moorthy, chairman, the Central Board of Direct Taxes, the apex direct taxes body.
He said advance tax payments by the top 100 companies in the country was up by 18%, much higher than the required 14% growth rate. The government has budgeted Rs 4.3 lakh crore from direct taxes in 2010-11 , more than half of its total tax revenue target of Rs 7.45 lakh crore.
These higher than budgeted tax collections have become crucial to the government staying within its budgeted fiscal deficit target of 5.5% of GDP. The surplus Rs 65,000 crore raised from the auction of 3G and broadband spectrum has already been accounted for by the two supplementary demand of grants requiring additional Rs 75,000 crore spending. The government has also cut its borrowing target of Rs 4.57 lakh crore for the fiscal by Rs 10,000 crore. Indirect taxes have grown at a faster 42% over April-November from a year ago.
If disinvestment in public sector oil companies Indian Oil Corporation and ONGC are held up due to any reason there could be additional pressure on the fisc. The government has budgeted Rs 40,000 crore from disinvestment in the current year. The rising commodity prices could also lead to a higher than expected subsidy bill.