More trouble for economy, direct tax collection in negative zone | WeForNews | Latest News, Blogs More trouble for economy, direct tax collection in negative zone – WeForNews | Latest News, Blogs
Connect with us

Business

More trouble for economy, direct tax collection in negative zone

Published

on

Stock Market Down

New Delhi, Jan 21 : The bad run for the Indian economy continues with the latest victim being the government’s direct tax kitty, where collections have now entered the negative zone for the very first time.

Government sources said that direct tax collection in the current fiscal up to January 15 has fallen by 6.1 per cent compared with the corresponding period of previous year.

While the development would test the government’s ability to manage its finances and contain the deficit, it has the potential to virtually seal the fate of any big tax cut announcement in the coming Budget.

According to sources, direct tax collections stood at Rs 7.26 lakh crore in the April-January 15 period of FY20 as compared to Rs 7.73 lakh crore in the same period of the previous year.

It is after a long gap that the tax collection is actually lower than the numbers given in the previous year. Already the development has rung the alarm bells that current economic crisis may be deep-seated and take much longer time to recover from.

Revenue Department officials have attributed the shortfall to a combination of the government’s decision to cut corporate tax rates in September, the overall economic slowdown and the reshuffle in the department following the implementation of the faceless tax assessment plan that has been carried out without preparation.

Finance Minister Nirmala Sitharaman had brought down effective tax rate on corporates from 35 to 25 per cent while announcing a new 22 per cent corporate tax rate for companies willing to forgo all exemptions and an even lower 15 per cent rate for new manufacturing units.

While corporate tax still commands a lion’s share in overall direct tax kitty of the government, it has been badly hurt in the third quarter of FY20 with collections remaining slow even in the month of January.

Sources said that between April and January 15 this year, corporate tax stood at Rs 3.87 lakh crore while collections under personal income tax head stood at Rs 3.29 lakh crore. The total collections from securities transaction tax (STT) stood at Rs 9,030 crore while another Rs 887 crore has come by way of equalisation levy.

The slowdown in collection has presented a pan-India picture with all major revenue collection centres such as Mumbai, Delhi, Bengaluru, Chennai, Pune, Hyderabad and Kolkata witnessing a fall.

As against the target of Rs 13.5 lakh crore in direct taxes during FY20, the government could mop up only Rs 6 lakh crore or less than 50 per cent till about mid-November.

Rating agency ICRA has estimated that the government’s gross tax revenue may fall short by Rs 3-3.5 lakh crore in FY20. This would have serious impact on the country’s fiscal deficit that is budgeted at 3.3 per cent of the GDP this year. Already, the government is finalising a plan to shift its financial consolidation goal post by two years, meaning the target to reach 3 per cent deficit would now be targeted for 2022-23 instead of 2020-21.

The GDP growth has already slowed down to six year low level of 4.5 per cent in July-September quarter of FY20.

Business

Bank credit growth may rise 200-300 bps next fiscal: Crisil

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

Published

on

By

Rupee

New Delhi, Feb 25 : Bank credit growth is set to bottom out but may rise 200-300 bps next fiscal while retail lending, supported by securitisation, will remain the key driver in the next fiscal.

The prolonged slowdown in bank lending may be bottoming out this fiscal, with gross credit offtake set to rise 8-9 per cent on-year in fiscal 2021, a good 200-300 basis points (bps) over the likely growth of 6 per cent this fiscal.

A gradual pick-up in economic activity, continuing demand for retail loans, and strong growth in lending by private sector banks should drive the uptick.

Recent policy moves announced in the Union Budget, and by the Reserve Bank of India (RBI) are also expected to provide the spur, Crisil Ratings said on Tuesday.

As for this fiscal, some growth momentum is expected in the fourth quarter, after a subdued three quarters — due to traditional fiscal year ending growth.

The RBI’s move to exempt banks from cash reserve ratio requirement for incremental credit to certain sectors for up to five years will also support lending.

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

Lending to the retail segment and non-banking financial companies showed good growth, while credit to corporates (ex-NBFC) and micro, small, and medium enterprises declined, Crisil said.

Continue Reading

Auto

Maruti Suzuki launches all new Vitara Brezza

Published

on

By

Maruti Suzuki Vitara Brezza

New Delhi, Feb 24 : Automobile major Maruti Suzuki India on Monday launched the all new compact SUV Vitara Brezza, which was unveiled at the recently held Auto Expo 2020.

The new vehicle has been priced in the range of Rs 7.34 lakh to Rs 11.40 lakh, the automobile major said on Monday.

According to the company, the new compact SUV offers enhanced sportiness, bolder looks, stronger stance, premium interiors and a host of new features.

The vehicle is equipped with the powerful 1.5 litre K-series BS6 petrol engine.

“The compact SUV will be offered with 5-speed manual and advanced automatic transmission with Smart Hybrid,” the company said in a statement.

In less than 4 years of its launch, Vitara Brezza has sold over 500,000 units.

Continue Reading

Business

Dow Jones plunges 1,000 points over coronavirus fears

Earlier this month, Apple, the world’s most valuable company, rang alarm bells on Coronavirus impact on its sales.

Published

on

By

us stock

Mumbai, Feb 24 : The possibility of a coronavirus pandemic sent shock waves across global markets on Monday. Dow Jones Industrial Average lost over 800 points within minutes of its opening.

A sharp sell-off in US markets followed worries of further disruption in economic activity as coronavirus related deaths jumped sharply, particularly outside China.

The S&P 500 traded lower by 84.89 points, or 2.54 per cent, at 3,252.86 while the Nasdaq Composite dropped 287.27 points, or 3 Aper cent, to 9,289.32 at the opening bell.

Italy saw virus cases jumping exponentially from three on Friday morning to more than 150 by Sunday. Italy’s spike now marks the biggest outbreak outside of Asia.

In China, the epicentre of the outbreak, the coronavirus related deaths jumped past 2,600. The deadly virus has infected more than 77,000 people in China and was described by President Xi Jinping as the “largest public health emergency since the founding of the country”.

Earlier this month, Apple, the world’s most valuable company, rang alarm bells on Coronavirus impact on its sales.

Jaguar Land Rover CEO Ralf Speth also reportedly said that the company does not have enough parts from China to maintain its British production post two weeks.

Continue Reading
Advertisement

Most Popular