June 18th, 2011
Econintersect: According to the final data released by the Government and quoted in the Economics Times, "Overall gross direct tax collections in the April-June quarter are up 45% compared to the year-earlier." This is a much larger growth in tax revenues than had been expected from preliminary reports on corporate tax receipts. Based on preliminary news agency releases, GEI News reported three days ago that first quarter advance tax payments from India's top 100 companies were up by 14%. Follow up:
"The trend is very encouraging. It shows that the growth story is intact," said one finance ministry official quoted in the Economics Times. The growth in tax revenues far oustripped the growth in the two preceeding quarters (30% and 19%).
From the Economic Times:
"the robust advance tax collections data will give some respite to the government looking at all possible avenues to raise revenues to meet any possible increase in expenditure. Subsidies provided for food, fertilizers and oil are expected to shoot up following a rise in global commodity prices."
Many analysts in India feel that slowdown in GDP growth in India will be moderate.
Advance tax is a leading indicator of industry's expected profits. It is paid in four installments in June, September, December and March and is based on the taxpayers' projected income. It will be interesting to see if the rather surprisingly high Advance Tax Collections are reflected in the overall GDP growth in the next three quarters of the current fiscal year.
Sources: Economic Times and GEI News
Article by Sanjeev Kulkarni
Sanjeev Kulkarni is an entrepreneur based in Pune, India. He worked for large organizations in board level position before venturing on his own. He is currently involved as an investor in health care software company and as an investor, mentor in an automation company. Very widely traveled, he has experience of working in different geographical areas with people of varying nationalities. He did his BS from Indian Institute of Technology, Delhi.