Another Sign of Recovery

The direct tax collection figures can indicate whether an economy is doing well or not. If the economy is passing through a slowdown and there is a contraction in industrial production and corporate earnings then the direct tax collected thereof would also be low. Also, in the event of a economic slowdown (if not recession) even if the direct tax collections, at least, matches with that of the figures prevailing in the good times then it is indeed a sign of recovery.

There were concerns among the policy makers of a lower mop up of direct taxes due to reduced corporate earnings. But, the all India figures for direct tax collection till September 5, totalling Rs. 90,039.7 crore, is actually higher than what it was for the corresponding period last year.

The finance ministry's projection for direct tax collection in the current fiscal year is about Rs. 400,000 crore. The last year's collection was targeted at Rs. 345,000 crore while the actual collection was lower by Rs. 6,000 crore. (Source: ET)