Finance Minister Arun Jaitley dismissed reports of a slowdown due to demonetisation as anecdotal, and said the “real” tax collection numbers gave a more accurate picture of how the economy was faring.

Direct and indirect tax collections for the nine months through December grew by 12% and 25% respectively, according to figures released by Mr. Jaitley on Monday.

Tax consultants, however, said the performance in some key areas had been disappointing, pointing to a slowdown in the economy.

Excise receipts grow

Central excise duty receipts grew 43% in the period while service tax collections grew 23.9% and customs duty collections advanced 4.1%.

Last year, the same period saw excise duty collections grow 68.2%, service tax rise 24.45%, and customs collections up 17.6%.

The slower growth in service tax “despite the increase in cesses over the year, definitely indicates a contraction,” D.K. Srivastava, Chief Policy Advisor at EY India said, adding that even the increase in direct tax receipts likely reflected advance tax payments made in December.

“And that is also one way in which the old notes could be converted, so people were choosing to do more of that,” Mr. Srivastava said. “Direct tax figures for this year would also take into account the first and second Income Declaration Schemes.”

“In December 2016, cCompared to last December, and you must keep in mind this December was the currency squeeze period, the customs duty collections has actually declined,” Mr. Jaitley said. “It’s (-)6.3%. Central excise has increased in December 2016, and this is related to manufacturing, by 31.6%. Service tax for December 2016 has increased by 12.4%.”

Mr. Srivastava added that even the 25% direct tax collections growth rate does not indicate that the economy has held up to demonetisation. “One must take into account that most advance tax payments would have been made in December,” he said. “And that is also one way in which the old notes could be converted, so people were choosing to do more of that. And then, direct tax figures for this year would also take into account the first and second Income Declaration Schemes.”