Growth in direct tax collections drops to 8.3 per cent
January, 09th 2012
India's annual growth in net direct tax collections slowed to 8.3% in the first nine months of the fiscal, deepening concerns that the government will miss its revenue targets.
Net direct tax collections had grown at 9% between April and November. Data released by the Central Board of Direct Taxes on Wednesday showed a mop up of Rs 3,23,955 crore between April and December 2011, up from Rs 2,98,957 crore in the year-ago period. Growth in gross direct tax collections also slackened to 14.5% during the period, reflecting a fall in tax buoyancy as the economy slows down.
Gross corporate and personal income tax collections equalled Rs 2,69,850 crore and Rs 1,25,998 crore, respectively, growing at an annual rate of 12.5% and 19%.
"Tax revenue collections may fall short of the budgeted levels given the moderating economic growth, which will dampen the buoyancy of tax collections," said Aditi Nayar, economist at ICRA.
A slowing growth in direct taxes collection implies that the government could miss the budget target of Rs 5.33 lakh crore by about Rs 20,000 crore, said an income tax department official. Experts are also sceptical about the Centre's ability to meet the budget estimate.
The government has already announced an additional borrowing of Rs 40,000 crore anticipating a shortfall in both tax and non-tax receipts.
The government's non-tax receipts from divestment and sale of spectrum have suffered in the current fiscal due to a volatile stock market and economic slowdown.