Union Finance and Revenue Secretary R S Gujral on Thursday flagged concerns over the dip in direct tax collection growth, saying it was indicative of a "slowdown in the economy".

Pointing out to disappointing advance tax collection for the second quarter, Gujral said, "There has been a decline. It does indicate a certain slowdown in the economy."

"The Government would monitor the space as we go along," he added.

The overall advance tax collections are estimated to have grown by 12 per cent in the September quarter against the budget target of 19 per cent. For top 100 companies, the growth was a modest 9.9 per cent.

Fears have been expressed earlier that weakening global economic environment and repeated rate hikes by the Reserve Bank in its quest to tame the uncomfortable inflation number are having an adverse impact on the economy.

According to the official data, growth in factory output also slowed down to 3.5 per cent for the month of August.

On the indirect taxes front, Gujral sounded confident of achieving the targeted number of Rs 3.92 lakh crore, in spite of the Rs 36,000 crore hit on account of cut in excise and customs duties on petroleum products in wake of rising global crude prices.

The Finance and Revenue Secretary did not give a direct answer when asked if the Government would achieve its target of collecting Rs 40,000 crore from the disinvestment programme this fiscal.

"You cannot disinvest without taking the timing into account. The market situation needs to be taken into account because you are disinvesting government shareholding in these companies," he said.

The Department of Economic Affairs on Wednesday had said it was considering other options like asking public sector undertakings to buyback Government equity so that the target was achieved.

"If there is any decline from the Rs 40,000 crore which has been assessed, that would be taken care of from the other aspects that are there," Gujral said, without elaborating.

A shortfall in collections from the divestment proceeds would not affect any planned spending by the Government on social programmes, he stressed.

When asked about the problems emanating from US (slowdown in growth) and the European Union (sovereign debt troubles) and its impact on exports, Gujral said the uncertainty is bound to exist for at least one year.

He, however, said that the country's exports would not go down in absolute terms though there may be some slowdown in percentage terms due to base effect.