Tax mopup to exceed target by Rs 37,000 cr

NEW DELHI: Finance ministry has raised tax collection estimates for the current year byRs 37,000 crore. The higher tax collections will come handy as government struggles to fund rising subsidies. “The budget target of tax revenue has been revised upward to Rs 7.82 lakh crore from Rs 7.45 lakh crore for the current fiscal,“ revenue secretary Sunil Mitra said on Monday.

The target for direct tax collection has been raised from Rs 4.30 lakh crore to Rs 4.46 lakh crore while that for indirect tax collection has been lifted to Rs 3.15 lakh crore toRs 3.36 lakh crore. “The revised estimates are likely because of the 9% growth,“ said Mitra. Indian economy grew 8.9% in the first half of 2010-11.

Direct tax collections rose 19.47% in April-December 2010, while indirect tax collections grew 42.7% for the same period. The buoyancy in indirect tax collections is largely due to sharp increase in customs collections, which have risen because of high growth in imports.

The direct taxes have been largely on course because of the robust corporate profits. The government is faced with rising subsidy bill with food, fertilisers and petroleum ministries demanding higher allocation in the current fiscal.

Higher taxes will help step up allocation as the over Rs 65,000 crore extra from the auction of 3G and broadband spectrum has already been accounted for through two supplementary demand for grants involving Rs 75,000 crore of additional spend.

The government has budgeted a deficit of 5.5% of GDP.

The extra revenues will help it within the limit despite a rise in subsidies.