Rs 40k-crore shortfall in tax revenues

FM hopes to raise Rs 18,000 crore more next fiscal

The economic slowdown will cause an almost Rs 40,000 crore shortfall in tax collections in 2012-13, according to the Revised Estimates (RE), but the finance ministry is targeting a 19 per cent jump in overall collections in 2013-14 over this year's RE. Rs 18,000 crore of this revenue gain is expected to come from Finance Minister P Chidambaram's tax proposals: Rs 13,300 crore from direct taxes and Rs 4,700 crore from indirect taxes.

Overall, the finance ministry has set next year's direct taxes target of Rs 6,68,109 crore, against the Budget Estimate (BE) of Rs 5,70,257 crore this year. Income tax collections will contribute to this rise. Interestingly, the BE for wealth tax for 2013-14 at Rs 950 crore is even lower than this year's BE of Rs 1,244 crore.

For indirect taxes, next year's target is Rs 5,65,002 crore, a small 11.8 per cent increase over this year's BE. Growth here will primarily be driven by service tax collections, projected to rise 45 per cent over this year's BE.

For the current financial year, the shortfall in indirect tax collection is Rs 35,498 crore; for direct taxes the shortfall is Rs 4,422 crore.

Both excise duty and customs collections fell short of the target by about Rs 22,000 crore each. Corporation tax collections also fell short of the target by over Rs 14,000 crore. Only income tax collections exceeded the estimate by about Rs 10,000 crore.