Some of India Inc.s leading lights such as Reliance Industries and Tata Steel have paid at least 40 per cent less corporate taxes in the October-December quarter.

Corporate honchos were blaming it on the slowdown, while finance ministry officials said companies were trying to improve cash flows and earn more interest by holding back payments till the last quarter.

However, the delay will compound the cash-flow problem of the government who will have to borrow more. The government today said it would issue fresh bonds worth Rs 46,000 crore between February 20 and March 20 to pay for the ongoing big-ticket schemes and a fresh stimulus package, which was expected to be announced soon.

If this trend continues into the next quarter, it will have even stronger implications on the governments borrowing, Partha Mukhopadhyay of the Centre for Policy Research said.

According to L.V. Prasad, a senior merchant banker, Next year, corporate houses are likely to pay less taxes, while the government will have to spend more on another round of stimulus and bailouts. The net result of which will mean even more borrowings.

Reliance Industries contribution in the last quarter fell to Rs 724 crore from Rs 1,262 crore in the year-ago period, a decline of 42.63 per cent.

Tata Steel, too, paid 42.63 per cent less at Rs 293.89 crore against Rs 506.07 crore, previously. Hindustan Unilever paid 42.54 per cent less corporate tax.

Segment-wise, petroleum products and lubricants firms paid 170.46 per cent less tax. IT hardware firms contribution fell 110.26 per cent, and the gems and jewellery sector paid 102.48 per cent less.

The significant dip could result in the government missing the corporate tax target of Rs 2,26,361 crore for this fiscal, analysts said. It is currently facing a tax shortfall of over Rs 1,20,000 crore. To meet the gap, attempts are being made to get reluctant tax-payers to pay up.

In direct tax, the deficit is Rs 1,00,000 crore, while it is Rs 20,000 crore in indirect tax.

The fall in indirect taxes is because of the slowdown, which has led to lower collections from exporters and importers.

Besides in December, the government announced tax cuts to stimulate the economy.