India sure seems to be on the right growth track! Indirect tax for FY15 surpasses estimates by Rs 4000cr

In a strong indication of India's economic recovery, the collection of indirect taxes has surpassed the revised estimates by Rs 4,000 crore to reach Rs 5.46 lakh crore for the fiscal ended March 2015, despite a slowdown in the manufacturing sector.

The total collection as on March 31 is Rs 5,46,479 crore, based on the provisional report as against revised estimates of Rs 5,42,325 crore for 2014-15, an official statement said.

Revised estimate was Rs 82,577 lower than the Budget estimate of Rs 6,24,902 crore for 2014-15.

At many occasions earlier, Finance Minister Arun Jaitley had said that the Rs 6.24 lakh crore indirect tax collection target for 2014-15 is challenging.

The provisional collections during the 2014-15 increased by 9.9 per cent as against the actual collections during 2013-14, which was Rs 4,97,061 crore.

Indirect tax collection growth is linked to industrial output. The growth in factory output, as measured by the Index of Industrial Production (IIP), grew by 2.5 per cent during April-January period of 2014-15, reflecting the slowdown.

However, details of individual categories like excise and customs are awaited but excess tax mobilisation would help the government in meeting its fiscal deficit target of 4.1 per cent.

Finance Minister Arun Jaitley is keen to meet the fiscal deficit target set by his predecessor P Chidambaram.

Jaitley had earlier said: "I will meet the challenging (fiscal deficit) target of 4.1 per cent of GDP which we have inherited."

He had also proposed bringing down fiscal deficit to 3.9 per cent of GDP in 2015-16, 3.5 per cent by 2016-17 and 3 per cent by 2017-18.

(Image courtesy: bankersadda.com)