The economy has slowed down to such an extent that there is a huge shortfall in the projected revenue receipts of the government. Add to that the increased freebies distributed like Diwali laddoos by the UPA government and you have an empty national treasury. As finance minister, P Chidambaram had put intense pressure on the income tax and other revenue-collecting wings of the government to try aggressively to meet the shortfall in revenue receipts.
As a result, income tax officials are putting pressure businesses to deposit more and more taxes, even if they protest that due to the economic slowdown, they are not liable to pay the sought amount. A number of businessmen in recent weeks received calls from IT officials, asking them why they had deposited smaller amounts in advance tax as against last year. Indeed, some of the raids undertaken by the IT department in recent days are part of the pressure tactics to step up tax collections.