Indirect tax mop up reflects healthy growth: CEA

Indirect tax collections have registered an increase of almost 36% in the first seven months of the current fiscal

Finance Ministry on Tuesday said the increase in indirect tax collections during the first seven months of the current financial year reflects a healthy rise in GDP (gross domestic product).

“April-October indirect tax growth: 35.9 per cent. And 11.6 per cent w/o new measures. Latter shows tax base-nominal GDP-growth healthy,” chief economic advisor Arvind Subramanian said in a tweet.

Indirect tax collections have registered an increase of almost 36 per cent in the first seven months of the current financial at Rs 3.83 lakh crore on spurt in economic activity.

These collections reflect additional measures like excise increases on diesel and petrol, increase in clean energy cess, withdrawal of exemptions for motor vehicles, capital goods and consumer durables and increase in service tax rates to 14 per cent from 12.36 per cent.

Stripped of all these additional measures, indirect tax collections increased by 11.6 per cent during the period April to October.

No cut in expenditure: Jaitley

Finance minister Arun Jaitley on Tuesday said there would be no cut in budgeted public expenditure this year as revenue collections, especially indirect taxes, are buoyant.

“So far, the indirect revenue till the month of October has significantly improved. Therefore, our ability to enhance public investment has improved...Our expenditure is going on planned lines and we don't see any cut being made in the proposed expenditure this year,” he said.

Excise collection, particularly, indicates manufacturing is moving up and that would restore some cycle as far as private investment is concerned, he said.

Observing that growth in India is driven by public investment and some private investment and an increased foreign direct investment, the Minister said, the government need large resource for new initiatives like Start up India, Skill India, Make in India.

He emphasised that the top priority of the government is to ease the doing of business in India.

As a result of which a turn around in India's rating has come about, he said, adding, "last month two important international agencies, the World Bank and World Economic Forum, from the declining position in the ease of doing business have reversed the trend."

It would also meet regularly to monitor the facilitation process and issue directions to the authorities concerned.