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General

Tax Collections Show Spirit

Income tax collections upto December 2010 make for a buoyant-economy story.

Net direct tax collections during first three quarters of the present fiscal (up to December 2009) stood at Rs.2,50,232 crore, up from Rs.2,30,598 crore in the same period last fiscal, registering a growth of 8.51 percent. Growth in Corporate Taxes was 13.47 percent (Rs.1,66,503 crore as against Rs.1,46,737 crore), while Personal Income Tax (including STT, and residual FBT and BCTT) grew at -0.41 percent (Rs. 83,178 crore as against Rs.83,524 crore).

The budget estimate for the whole year is 370,000 cr. which is about 10% growth over last year’s actually realized amount of 338K cr. Last year’s budget estimate was 365K cr, later revised to 345K cr. – both of which we didn’t make. The next three months will tell us the story, but we have to wait till March; in the last two years March alone accounted for 80K cr. collections.

We have got to make revenue targets, even if they are only with 10% growth. Our expenses, meanwhile, are growing at around 30% a year; and it will only increase with harebrained distributions like giving 1000 cr. to distilleries as alcohol producing “subsidy” so that farmers can sell foodgrains! [Sure, that’s a state matter, but a) just an example and b) NREGA is worse]