The central government has declared that the economy's net (post-refunds) direct tax receipts till September 2, FY22 have increased 95% on-year to Rs. 3.7 lakh crore. A surge in manufacturing and service sector activities, healthier corporate earning and compliance, coupled with developing employment scenarios, have aided to improve the figure.
However, a low base of the earlier fiscal is a significant reason behind this massive surge, as net direct tax receipts were Rs. 1.9 lakh crore till September 2, FY21. But the economists are willing to focus on this surge because this fiscal's collections are even better than the pre-pandemic fiscal's collections. In FY22 the net direct tax receipts have improved by 31% than August 31, FY20.
The union government's net tax receipts, including indirect taxes in this fiscal have increased 2.6 times on a year-on-year basis to Rs. 5.29 lakh crore in April-July which is 32.2% compared to a 12.4% growth in the same period of the previous fiscal. The government's target of tax collection for the FY22 period is Rs. 11.08 lakh crore, and the April 1 to September 2 collection is just 33%, which needs a 17% growth with a steady collection pace in the remaining months of FY22.
The country's private consumption and investment growth are not quite considerable at the moment, although the tax revenues are gaining strength. The government's GST collection has also been helping to increase the overall revenue generations along with direct tax receipts. The more the economy will show resilience with better stimulus and easier taxation policy, the more the economy's revenue will develop. Since the earlier fiscal, India's tax collections surged in the second half of the year, while in the upcoming months, the government is expecting improvement in tax receipts.