Corp Tax Collection May Meet Estimate - Jan 27, 2009

The growth in corporate tax collection was likely to meet the budget estimate level of 26.1 per cent backed by a ''recovery'' in the last quarter of the current fiscal, an economic-think tank has said.

"Advance tax payment was down 22 per cent to Rs 42,000 crore in December 2008 over the year-ago level. However, corporate tax collection is likely to revive in the last quarter of the current fiscal", Centre for Monitoring India Economy (CMIE) has said in its report. However, the budget amount for corporate tax collection is Rs 2,26,361 crore for the financial year 2008-09.

CMIE said "In the year 2008-09, growth in corporate tax collection is expected to reach the budget growth of 21.6 per cent". According to CMIE, corporate tax collection registered an impressive growth, registering 38.2 per cent in the first half of the current fiscal. Despite a drop in revenue recorded in October and November 2008, the cumulative growth till November remained robust at the same level, the report said.

CMIE expects India Inc would enhance its profits, riding piggyback on the steep fall in crude oil prices in the international market and large payments to fertilizer companies towards fertiliser subsidies. In the last quarter of 2008-09, PAT is estimated to grow by an impressive 38 per cent, the report said.

Industrial Sector To Grow By 10.4% In FY 09, Says CMIE

Mumbai: Centre for Monitoring Indian Economy (CMIE) has estimated the expansion at 10.4 per cent for fiscal 2009. CMIE expectS the industrial production to grow by 10.4 per cent in FY 09. The current investment boom is expected to correct the slowdown problem. The reason for the current slowdown in industrial production was the supply problem faced by sectors like cement, aluminium, electricity and steel.

India''s industrial growth slipped to 5.3 per cent in January as compared to 11.6 per cent in the same month last year as growth in all major sectors comprising manufacturing, electricity and mining declined. It expected the country''s gross capital formation to increase by 15.5 per cent in FY 09 and continue to drive growth in its GDP.

CMIE said India''s GDP was expected to grow by 8.9 per cent in FY 08 and 9.1 per cent in FY 09. The real GDP grew by 7.5 per cent in FY 05, nine per cent in FY 06 and 9.6 per cent in FY 07. CMIE''s prediction of a 9.1 per cent growth in real GDP in FY 09 is based on the assumption of an adequate precipitation during the monsoon. Besides, the Union Budget would help fuel growth as the finance minister has proposed a sharp cut in tax rates. For a large section of urban Indian households, this translates into significant additional spending power, CMIE said, adding this is bound to lead to a substantial increase in the demand for consumer durables and other goods and services that have taken a hit in the recent past.