Tax authorities will be required to collect indirect tax of over ₹97,000 crore every month during February and March to achieve the Budget estimate, as desired by the Prime Minister, if the latest data of the Finance Ministry on collections is any indicator.
The latest data showed total indirect tax collection during April-January period of current fiscal at around ₹4.28 lakh crore with a growth rate of over 7 per cent. This is around ₹1.95 lakh crore less than the Budget estimate. The Government has set target growth rate of 25.8 per cent for the full fiscal (April 1, 2014-March 31, 2015).
Achieving the tax collection is also critical to keep the fiscal deficit within the Budget estimate of 4.1 per cent of GDP or ₹5.31 lakh crore, though it has already crossed this in the month of December itself.
Meanwhile, there is extraordinary performance in excise duty collection in the month of December. It shows that manufacturing has improved. Latest industrial data shows that manufacturing grew by 2.1 per cent in December as against (-) 1.1 per cent during December, 2013. However, HSBC Purchasing Manager Index (PMI) for manufacturing registered decline in January from December indicating the growth rate in manufacturing might come down slightly.
Though, tax authorities have initiated many steps to augment revenue collection such as raising duty four times on petrol and diesel besides raising duty on edible oil, but still they apprehend shortfall of around ₹70,000 crore. In 2013-14, indirect tax collection was over ₹4.95 lakh crore against the budget estimate of ₹5.64 lakh crore and revised estimate of ₹5.18 lakh crore.