Finance minister Pranab Mukherjee on Friday said the direct tax collection has surpassed the Rs 3.7 lakh Budget Estimate in 2009-10. Collections, however, are likely to fall short of revised estimates of Rs 3.87 lakh crore for 2009-10. He also said that measures taken by the government in the Budget would help the economy return back to 9% growth rate.
"I am optimistic that the measures I have outlined in this year's Budget will revive private investment and put the economy back on the growth path of 9%," he said. India is projected to grow at 7.2% in 2009-10, as per Central Statistical Organisation data,
"It (direct tax collection) is well above the Budget estimate," Mukherjee said on the sidelines of a function to commemorate the 20th foundation day of Small Industries Development Bank of India (Sidbi). Direct taxes include corporate tax, personal income tax and wealth tax.
During the April-February 2009-10, direct tax collection was Rs 2.78 lakh crore, nearly Rs 1 lakh crore short of the Budget Estimate. In February, direct tax collection grew by a robust 27.54% on a year-to-year basis, as compared to a 19.84% contraction in January.
Speaking at the function, Sidbi CMD RM Malla said the bank expects to receive about $600 million of funding from multi-lateral agencies in the current fiscal.
"We expect $300 million loan from the World Bank and another 30 billion yen (about $300 million) Japan International Cooperation Agency (JICA) in 2010-11," Malla said.
Of the total World Bank loan, $200 million is for the micro credit and the remaining $100 million for the SME sector growth, he said. The JICA loan would be used for financing energy efficient projects of MSMEs, he said.
Recalling that fiscal 2009-10 began on a difficult note, the finance minister said that the efforts made by the government to boost the economy yielded fruits. "The fast-paced recovery of the Indian economy underscores the effectiveness of the policy response of the government in the wake of the financial crisis," he said.
Mukherjee said the good news is that the world economy is recovering from the severe financial crisis, which slowed growth around the globe. Referring to the Micro Small and Medium Enterprise (MSME) sector, he said, the report of Prime Minister's Task Force would be examined by the government in a time-bound manner. The Task Force had made a case for making available more credit to the small-scale sector, which faced the brunt of the global slowdown.
Mukherjee said "timely availability of credit to MSMEs is extremely important to meet their growing needs and to help them keep their business lifeline vibrant and progressive." The MSME sector contributes 8% of the country's GDP, 45% of the manufactured output, 40% of exports and employs nearly 6 crore people through 2.6 crore enterprises, he said.