“Let me recall what I said. If voluntary compliance (in taxes) increases there is a case for moderation. That does not mean the case has been accepted. You make a case for moderation instead of writing imaginary stories,” Mr Chidambaram told reporters here.

He was replying to a question on his earlier statement that there was a case for moderation of taxes if voluntary compliance raised tax collection. During April-December period, direct tax collections after paying refunds crossed Rs 2,05,000 crore. registering a growth of 42.36 per cent.

For the first time, direct tax collections would surpass indirect tax collections, Mr Chidambaram pointed out.

Tax directorate

Corporate tax collections grew 39.84 per cent to Rs 1,27,683 crore, while personal income tax, including security transaction tax, fringe benefit tax and banking cash transaction tax, grew by 50.06 per cent to Rs 77,380 crore.

Mr Chidambaram also announced setting up a Directorate of Human Resources for direct tax department aimed at restructuring of department for enhancing voluntary tax compliance.

Fiscal deficit during April-November period stood at Rs 96,274 crore, 63.8 per cent of the annual target of Rs 1,50,948 crore or 3.3 per cent of GDP.

Fiscal deficit during April-November 2006-07 was 72.8 per cent of that year’s budget estimate, according Controller General of Accounts data. Meanwhile, revenue deficit rose to Rs 69,974 crore or 97.9 per cent of the budget estimate as against 99.7 per cent during the same period in the last financial year.