The Union government expects to slightly better its excise duty collection target for 2010-11 set at the beginning of the last budget. This would be reflected in revised estimates of Rs 1,33,300 crore for the year, presented in the coming budget, about one per cent higher than the earlier budget estimate of Rs 1,32,000 crore.
Though this appears only a meagre increase over the estimates, it is good news given the way excise duty collections dipped in the past over budget estimates.
“Seeing our performance, our finance minister in revised estimates pegged it at Rs 1,33,300 crore,” a ministry official said here.
He exuded confidence on not only meeting the revised estimates but also surpassing it.
In recent years, excise duty collections had always played truant to the expectations. For 2009-10, the government revised down its excise duty collections to Rs 1.02 lakh crore from budget estimates of Rs 1.06 lakh crore. This was because of the slow growth of industry due to the global financial crisis and a six per cent cut in excise duty since December 2008. For similar reasons, the government drastically cut its budget estimates of Rs 1,37,874 crore for 2008-09 to Rs 1,08,359 lakh crore. It finally got slightly better results at Rs 1,08,613 crore.
This time, the kitty grew by 33.2 per cent from excise duty collections till January this financial year over the same period the earlier year. Till December, it had collected Rs 93,281 crore from excise duty, up by 33.7 per cent over the same period figures in 2009-10. The buoyancy is partly attributed to some roll back of the earlier stimulus, as the government had raised this duty by two percentage points to 10 per cent for 2010-11.
Yet, even after upward revision, excise duty collections for this financial year will be less than the budget estimates for 2008-09.
Overall, the government has set a revised target of Rs 3.36 lakh crore for indirect tax collections against Rs 3.15 lakh crore in the budget estimates of this financial year.
For the first half of January, the Government’s collections from customs duty were up 70 per cent and that from services tax is growing by 15-20 per cent, the official said.
The revised target for indirect tax collections, coupled with direct tax collections’ revised target of Rs 4.47 lakh crore from 4.30 lakh crore pegged in the Budget estimates, would help the government prune its fiscal deficit much below 5.5 per cent of GDP for 2010-11.
