The government said that tax arrears rose over 18 per cent to Rs 2.93 lakh crore as on March 31, 2010 against the year-ago period.

The direct tax arrears grew over 16 per cent to Rs 2.48 lakh crore as on March 31, 2010 compared to Rs 2.13 lakh crore at the end of 2008-09, Minister of State for Finance S S Palanimanickam said in a written reply to Rajya Sabha.

Direct tax includes income tax, corporate tax, wealth tax, among others.

On the other hand, arrears of indirect tax, which constitutes central excise, customs and service tax, increased to Rs 44,212 crore as on March 31, 2010 as compared to Rs 33,790 crore at the end of 2008-09. Thus, registering a gain of over 30 per cent.

Palanimanickam further said that the target of recovery of tax arrears pertaining to direct and indirect taxes is fixed at the beginning of the respective financial year.

The targets of tax arrears' recovery in respect of direct and indirect taxes for the financial year 2010-11 are fixed at Rs 13,906 crore and Rs 3,250 crore, respectively.

The government has set a budget target of Rs 4.3 lakh crore for the indirect tax kitty for this financial year.

Combined target for both direct and indirect tax collections for the year is Rs 7.45 lakh crore.