Advance tax collections confirm recovery signs

Tell-tale signs of an economic recovery are evident if the sectoral trends in the advance tax collections are anything to go by.

Tell-tale signs of an economic recovery are evident if the sectoral trends in the advance tax collections are anything to go by. Indicators from major sectors including automobiles,food,textiles and food show that 2009 was indeed the year of economic revival.

The sector-wise trend in the advance tax collection during the third quarter ending December shows that the metal and mining sector,which was in the red in the first two quarters,grew by 50.81 per cent to Rs 3,126.62 crore in the third quarter over the corresponding period last year. Similarly,steel also grew by a whopping 75.99 per cent to Rs Rs 2,131.60 crore during the October-December period. There was a negative growth in the sector in the first two quarters. All three quarters taken together,the advance tax collections in the steel sector stood at a negative 8.87 per cent,official sources told The Indian Express.

The most significant jump was seen in the textiles sector,which grew by a monumental 793.05 per cent at Rs 199 crore in a clear indication of the consumer demand rising. The advance tax collections in the FMCG sector and the food sector grew too to almost double despite the rising food inflation.

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The sources said the budget estimate of Rs 3 lakh crore would be easily met if the current growth rate in collection is maintained. Further,the Rs 4 lakh crore target,set by the department internally,is also likely to be met if the current positive trend continues.

As such,the economy rebounded strongly during the second quarter of the financial year and grew at 7.9 per cent. The recovery amid the global financial crisis was led by a 9.2 per cent growth in manufacturing compared to the 5.1 per cent growth in the sector during the same quarter last year.

Mining and construction activities also expanded by 9.5 per cent and 6.5 per cent respectively.

The advance tax collections in the manufacturing sector showed a robust 60.48 per cent during the third quarter while 30.55 per cent during the April-December period over the corresponding period a year ago.

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There was also a significant jump in the advance tax collections from the media industry which grew by 201.77 per cent during the third quarter while for the first nine months,the collections stood at Rs 341.45 crore,up 272.66 per cent from the corresponding period a year ago.

Another indicator,the telecom sector,also showed a huge jump at Rs 547.7 crore,up 233.46 per cent compared to the previous year.