Net Direct Tax Collection Jumps Around 18%

The provisional figures of Direct Tax collections for the Financial Year (FY) 2023-24 show that Net collections are at Rs. 19.58 lakh crore, compared to Rs. 16.64 lakh crore in the preceding Financial Year i.e. FY 2022-23, representing an increase of 17.70%. The Budget Estimates (BE) for Direct Tax revenue in the Union Budget for FY 2023- 24 were fixed at Rs. 18.23 lakh crore which were revised and the Revised Estimates (RE) were fixed at Rs. 19.45 lakh crore. The provisional Direct Tax collections (net of the refunds) have exceeded the BE by 7.40% and RE by 0.67%.

The Gross collection (provisional) of Direct Taxes (before adjusting for refunds) for the FY 2023-24 stands at Rs. 23.37 lakh crore showing a growth of 18.48% over the gross collection of Rs. 19.72 lakh crore in FY 2022-23. The Gross Corporate Tax collection (provisional) in FY 2023-24 is at Rs. 11.32 lakh crore and has shown a growth of 13.06% over the gross corporate tax collection of Rs. 10 lakh crore of the preceding year. The Net Corporate Tax collection (provisional) in FY 2023- 24 is at Rs. 9.11 lakh crore and has shown a growth of 10.26% over the net corporate tax collection of Rs. 8.26 lakh crore of the preceding year.

The Gross Personal Income Tax collection (including STT) (provisional) in FY 2023- 24 is at Rs. 12.01 lakh crore and has shown a growth of 24.26% over the Gross Personal Income Tax collection (including STT) of Rs. 9.67 lakh crore of the preceding year. The Net Personal Income Tax collection (including STT) (provisional) in FY 2023-24 is at Rs. 10.44 lakh crore and has shown a growth of 25.23% over the Net Personal Income Tax collection (including STT) of Rs. 8.33 lakh crore of the preceding year. Refunds of Rs. 3.79 lakh crore have been issued in the FY 2023-24 showing an increase of 22.74% over the refunds of Rs. 3.09 lakh crore issued in FY 2022-23.

Meanwhile, the Government of India has received Rs 22,45,922 crore (81.5% of corresponding RE 2023-24 of Total Receipts) upto February, 2024 comprising Rs 18,49,452 crore Tax Revenue (Net to Centre), Rs 3,60,330 crore of Non-Tax Revenue and Rs 36,140 crore of Non-Debt Capital Receipts. Non-Debt Capital Receipts consists of Recovery of Loans Rs 23,480 crore and Miscellaneous Capital Receipts of Rs 12,660 crore. A total of Rs 10,33,433 crore has been transferred to State Governments as Devolution of Share of Taxes by Government of India upto this period which is Rs 2,25,345 crore higher than the previous year. Total Expenditure incurred by Government of India is Rs 37,47,287 crore (83.4% of corresponding RE 2023-24), out of which Rs 29,41,674 crore is on Revenue Account and Rs 8,05,613 crore is on Capital Account. Out of the Total Revenue Expenditure, Rs 8,80,788 crore is on account of Interest Payments and Rs 3,60,997 crore is on account of Major Subsidies.

IMF Says World Needs To Shift Focus On Fiscal Policy

International Monetary Fund (IMF) has recently noted that the global financial and economic outlook has improved. Inflation has fallen. Financial conditions have eased. And risks to the global outlook are becoming balanced. It is time to shift focus to fiscal policy, the fund opined. Four years after an unprecedented pandemic response, public debts and deficits remain elevated. After sharp declines in 2021 and 2022, public debt and deficits edged up in 2023, undermining momentum for their return to prepandemic levels. In fact, only half of the world’s economies tightened fiscal policy last year, down from 70 percent in 2022. As a result, global public debt edged up to 93 percent of GDP in 2023 and remained 9 percentage points above prepandemic levels. Moderate fiscal tightening is expected to resume this year, but significant uncertainty remains. While modest fiscal tightening is projected over the medium term, it will be insufficient to stabilize public debt in many countries.

Outlook:

The sound trend in tax collections in India clubbed with a generally positive outlook for growth may keep government finances on a good footing in near term. The Asian Development Bank (ADB) has raised India's GDP growth forecast for the current fiscal to 7 per cent, from 6.7 per cent earlier, saying the robust growth will be driven by public and private sector investment and improvement in consumer demand. Latest drop in crude oil prices and expectations of a normal monsoon may also turn out to be key factors.