India Exceeds Tax Target by USD 812 Million
January 25, 2011 Taxation in India
India’s tax revenue estimates for the current fiscal year have been revised upwards by 4 percent, after continued high-levels of economic growth throughout 2010.
On January 25th the Revenue Minister of India Sunil Mitra announced that the Government has significantly raised the national tax collection estimates for the 2010 – 2011 fiscal year. The overall revenue estimate has been hiked by a substantial INR 37 billion (approx. USD 812.2 million), to a total of INR 782 billion (approx. USD 17.2 billion).
The reviewed tax target is primarily comprised of an INR 16 billion (approx. USD 351.3 million) forcasted hike in the direct tax collection target, and an INR 19 billion (approx. USD 417.5 million) increase in the indirect tax estimates. Overall, the revised tax target represents a 4 percent growth in tax revenues.
The Minister explained that indirect tax collections have been particularly buoyant this year due to increased levels of oil imports and the withdrawal of several stimulus measures implemented as a response to the recent global financial crisis. The improvements in direct tax collection were attributed specifically to the overall increased economic activity seen throughout the current fiscal year. Currently the Government projects that the overall growth rate for the 2010 – 2011 fiscal year will be approximately 9 percent. Comparatively, in the previous year national GDP growth reached 7.4 percent.
The revised tax revenue estimates are expected to be used in order to reduce the Government’s fiscal deficit to its self-set target of 5.5 percent. International economists have already suggested that the Indian government’s deficit target will be easily met, due to the revised tax figures along with national auctioning of the 3G mobile spectrum and the sale of some major state assets.
Photo by t3rmin4t0r