The Centre's direct tax collections soared 83.7 per cent in the first half of fiscalStates' tax collections reached pre-pandemic levels in the first half of the current fiscal year, according to the December issue of the Reserve Bank of India's bulletin.
Government finances, both of the Centre and states, showed resilience during the first half of the current fiscal, with tax mop-up surpassing expectations by a wide margin and expenditure remaining broadly in line with Budget estimates despite higher pandemic-related spending, according to RBI.States' spending was 37.8 per cent of the budgeted target, broadly in line with the average during the pre-pandemic years.
The paper, by the central bank's house economists, also notes a "marked improvement in the quality of expenditure" for both the Centre and states, which bodes well for a durable growth revival.The Centre's direct tax collections soared 83.7 per cent in the first half of the current fiscal, led by growth in income tax and corporate tax at 64.7 per cent and 105.1 per cent, respectively, on the back of strong corporate performance, says the paper.The Centre's indirect tax collection also increased in April-September this year, led by a more than 100 per cent jump in customs duty collection and higher crude oil prices and on the back of improving trade activity and higher import demand.The second wave in April-May this year turned out to be more severe in terms of loss of human lives, but the impact on economic activity was contained through localised lockdowns and also better adaptation to live with the virus, the bulletin said."Thrust on capex has resulted in a significant improvement in the quality of expenditure, a necessary condition for pro-growth fiscal consolidation in the medium-term," it said.