In a robust signal of recovery underway in the Indian economy, advance tax numbers for the second quarter of the fiscal have shown buoyant growth. The good thing is that the recovery party is being celebrated across most of the industries, especially the banking, automobile, oil and gas and infrastructure space.
Reliance Industries, the country’s largest company by market capitalisation, has paid Rs 1,157 crore against Rs 314 crore in the immediate previous quarter. Similarly, BPCL paid Rs 312 crore against Rs 40 crore. In the banking space, State Bank of India and ICICI Bank have paid advance tax of Rs 1,838 crore (Rs 1,068 crore in the first quarter of the fiscal 2009-10) and Rs 501 crore (Rs 250 crore) respectively.
IT industry also seems to be refuting any impact of slowdown in the west with software major TCS paying an advance tax of Rs 220 crore against Rs 53 crore in the previous quarter. In the auto space Tata Motors paid Rs 100 crore (Rs 30 crore) while Mahindra & Mahindra’s tax payment went up 600% to Rs 112 crore. Engineering giant L&T has paid Rs 210 crore (Rs 110 crore).
Second quarter collections usually are a good indicator regarding whether the government would be able to meet the collection target for the financial year, and the figures received so far have certainly shown strong performance in this respect. The target for direct tax collections for the current fiscal has been fixed in the union budget at Rs 3,70,000 crore, nearly 10% higher than Rs 3,38,212 crore last year.
The surging advance tax numbers also point out that growth was likely to remain reasonably strong in the September quarter despite poor monsoon. While the farm output is most likely to decline, advance tax numbers certainly indicate that both manufacturing and services sectors were witnessing strong growth which would compensate for the loss of growth in the farm sector.