Cashing in on the “feel good” sentiment in the Indian economy, the Gross Direct Taxes collections during April-September of the current financial year 2014-15 have recorded an impressive 15 per cent jump and stood at Rs 3,46,144 crore as against Rs 3,01,063 crore during the same period last year.
The handsome hike in direct tax collections came on a day when the World Bank credited Prime Minister Modi for the proposed lifting of country’s economic growth to 6.4 per cent in 2015-16.
Experts have correlated this with the overall positive sentiments which have the sent the stock markets on a record-breaking spree since the past couple of months, as well as falling oil prices (with Brent North Sea crude having touched a two-year low of $91 per barrel). Industry watchers said that the optimism within the corporate and financial sectors over hopes of the Narendra Modi-led NDA Government taking some investor-friendly initiatives seems to have spurred the tax collections.
This is visible from the fact that gross collection of Corporate Tax has shown an increase of 15.31 per cent and stood at Rs 2,22,616 crore as against Rs 1,93,054 crore collected during the same period last year.
Similarly, gross collection of Personal Income Tax, including Securities Transaction Tax (STT) and Wealth Tax, is up by 14.37 per cent and stood at Rs 1,23,528 crore as against Rs 1,08,009 crore collected during the same period last year. STT stood at Rs 3,223 crore, registering a growth of 45.83 per cent.
Though at the same time, net direct tax collections were up by 7.09 per cent and stood at Rs 2,68,836 crore, as compared to Rs 2,51,028 crore during the same period in the last fiscal.
Advance tax collections have shown a growth of 15.28 per cent during the first half of the year as against the growth of 7.66 per cent shown at the same time previous year. Growth in Tax Deduction at Source (TDS) is 9.47 per cent as against 14.22 per cent in the same period last year.
A ‘Modi dividend could lift India’s economic growth to 6.4 per cent in 2015-16, the World Bank said, referring to a possible boost to the animal spirits of entrepreneurs due to the coming to power in May of a Government perceived to be more market-friendly than the previous one.
“The Indian economy, 80 per cent of the (South Asia) region’s output, is set to grow by 6.4 per cent in 2015-16 after 5.6 per cent in 2014-15... India is benefiting from a ‘Modi dividend,” noted the World Bank’s bi-annual report, South Asia Economic Focus.