JOIN USMassive rise in tax collection
A good indication of a huge expansion in the economic activity in the country was available on Wednesday from the Central government's indirect tax collections for the first eight months of the current fiscal year.
The indirect tax collections during the April-November period rose by a whopping 42.3 per cent to Rs 2.07 lakh crore compared to the same period of the last fiscal year, according a statement from the Union Finance Ministry.
The indirect tax accrual rate is likely to remain high during the remaining four months of the fiscal year. While the growth rate in indirect tax collection may be partly attributed to last year's slow down and the withdrawal of some of the tax concessions the government had extended last year to shield the economy from the global recession that alone might not explain the huge increases seen during the last eight months.
For, the 42.3 per cent expansion in the indirect tax revenue is the best for the last six years. During the last five fiscal years beginning with 2004-05, the indirect tax collections annually grew by: 15 per cent, 17 per cent, 21 per cent, 15 per cent and last year (-) 4.5 per cent.
This is obviously expected to reflect in higher growth in gross domestic product (GDP) during the current fiscal year.
While GDP growth rate has already touched 8.5 per cent for the first few months, it is expected to cross the 9 per cent for the full year.
The growth activity appears to be well spread out across all important sectors of the economy. The industrial output in October rose by 10.8 per cent on back of healthy performance of sectors such as automobile, electronic goods and power.
The indirect tax collections come overwhelmingly from of customs, central excise and service tax. The revenue collections from customs have increased to Rs 86,844 crore during April-November 2010.