India to meet fiscal targets
New Delhi, January 2, 2008
The Indian government expects to meet its revenue and fiscal deficit targets for the year to March on the back of robust corporate and income tax receipts, Finance Minister Palaniappan Chidambaram said yesterday.
He also said there was 'a case for moderation' of direct tax rates if voluntary compliance increased.
"During April-December, the growth in corporate tax collection is better at 40 per cent and personal income tax at 50pc," he said.
Finance Ministry figures showed corporate tax receipts of 1.28 trillion rupees ($32.5 billion) and income tax receipts of 773.8 billion rupees in the first nine months of the 2007/08 fiscal year.
Direct taxes receipts crossed 2.05 trillion rupees in the nine months, up 42.4pc from a year earlier, and looked set to cross 3 trillion mark this fiscal year, the ministry said.
The government had set a target for direct tax receipts of 2.67 trillion rupees for 2007/08.
Tax receipts have risen on a booming corporate sector and strong economy.
The stock market rose 47pc last year and the economy is on track to meet the central bank's forecast of 8.5pc growth in 2007/08.
"Service tax and customs collections are more or less on target. There was some shortfall in excise collections," Chidambaram said of indirect tax receipts. Overall revenue buoyancy would help the government meet its fiscal and revenue deficit targets for 2007/08, he said. India aims to cut its fiscal deficit to 3.3pc of gross domestic product by the end of 2007/08 from 3.5pc a year earlier.