Good news for economy: FDI up 56%; indirect tax kitty rises by 16.1%
January, 11th 2012
Foreign direct investment (FDI) into India went up by an impressive 56 per cent to $2.53 billion in November 2011, signalling improvement in investor sentiment.
The cumulative flows of $22.83 billion for the April-November period have crossed $19.43 billion which came in the full fiscal of 2010-11, according to officials.
Analysts feel that if the trend continues, the FDI in the current financial year would well cross $30 billion, a development which will have a positive effect on rupee in the foreign exchange market.
In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15 per cent since August. While the FII inflows are considered "hot money", the FDI is quite stable.
The improvement in FDI inflows in November comes after two months of declining trend. The country had received $ 1.62 billion overseas investment in November 2010. In September and October, the inflows were down by 16.5 per cent and 50 per cent year-on-year respectively.
During the April-November period, the FDI was up by 62.81 per cent from $14.02 billion a year ago. "At this rate we would be able to cross $30 billion figure by end of the current fiscal," the official added.
In 2010-11, FDI into equity had dipped 25 per cent to $19.43 billion, from $25.6 billion in 2009-10. In 2008-09, FDI stood at $27.3 billion. Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India.
Sectors which attracted the maximum funds include services, construction activities, power, computers and hardware, telecom and housing and real estate.
Indirect tax collection
Belying concerns over slowdown, indirect tax collections increased 16.1 per cent to Rs 2,85,787 crore during April-December mainly driven by an uptick in service tax mop-up. Total collection of indirect tax, Customs, Central Excise and Service Tax, was Rs 2,46,168 crore in the same period last year.
"We hope we will be able to meet the Budget Estimates of Rs 3,92,908 crore (from indirect taxes) this fiscal," chairman of Central Board of Excise and Customs ( CBEC) S K Goel told reporters while releasing the data. The indirect tax collection in three quarters of 2011-12 is about 72.7 per cent of the Budget Estimates.
The collection has shown a growth despite Rs 36,000 crore revenue forgone on account of customs and excise tax cut on petroleum products. The levies were slashed in June to provide a cushion to consumers against hike in prices of diesel, kerosene and LPG were hiked.