Tax Receipts Fall Short 12.5% in India

123jump.com Staff
04 Feb, 2009
New York City

A rally in stocks in India came to a halt after the tax department estimated a shortfall of 12.5% in collection in the first eleven months of current fiscal year. However, the government maintained that the collection will meet its target.

[R]11:00AM New York, 9:30 PM Mumbai – A rally in stocks came to a halt after the tax department estimated a shortfall of 12.5% in collection in the first eleven months of current fiscal year. However, the government maintained that the collection will meet its target.[/R]

Indian stocks in early trading rose but lost most of the gains after the income tax department estimated lower collection of advanced taxes.

The Sensex increased to 2.1% earlier in the morning session, but gains were pared by a sell-off in the afternoon session as the government reported lower-than-expected tax collection in the current fiscal year ending in March.

In Mumbai, the BSE 30-share Sensex Index rose 0.6% or 52.55 to 9,201.85, and the CNX Nifty gained 0.7% or 19.15 to 2,803.05.

Of the stocks traded on BSE, 1,162 rose, 1,306 declined, and 65 shares remained unchanged.

Trading Statistics

Daily turnover on the BSE declined to 2,935 crore rupees from 3,212.91 crore rupees yesterday.

India’s Tax Collection 12.5% Lower than Target

Economic Times of India reported today that Central Board of Direct Taxes chairman S N Moorthy said today tax collection until February 1 dropped 12.5%, below the target to 2,47,000 crore rupees or app $50 billion.

The budget estimate was 3,65,000 crore rupees.

“In the direct tax collection, there is a gap of more than 1,00,000 crore rupees and we are hopeful of reaching the budget estimate,” said Moorthy.

However government maintains that the 365,000 crore rupees target will be met.

India Needs Further Stimulus, Singh

India’s Planning Commission deputy chairman Montek Singh Ahluwalia said today the country might need a further stimulus plan in the fiscal year beginning April.

“We are not sure whether the recovery will begin in late 2009 or 2010, therefore it is very clear that a stimulus is needed.” said Ahluwalia.

Gainers & Losers

Reliance Industries increased 0.4% to 1,307.40 rupees.

ONGC rose 2.4% as crude oil prices rose above $41 a barrel after the OPEC said it will steeply lower production.

Bharat Heavy Electricals advanced 1.1% after announcing that it will set up a joint venture with a Kerala-based firm for manufacturing products for railways and other industries. Larsen & Toubro fell 0.7%.
Financial stocks fell on fears over the health of the global economy. HDFC Bank fell 0.3% to 896.40 rupees, ICICI Bank fell 0.5% to 389.60 rupees and State Bank of India rose 0.5% to 1,096.90 rupees.

HDFC rose 0.69%.

IT stocks dropped after the National Association of Software and Service Companies slashed the sector’s export growth target for the current year. Wipro dropped 0.1% to 223.95 rupees and TCS dropped 0.2% to 499.05 rupees.

Infosys Technologies gained 0.04% to 1,282.95 rupees and HCL Technologies advanced 3.7%.

Maruti Suzuki India edged up 3.1% after vehicle sales gained 5.4% to 71,779 units in January 2009 in January from a year ago.

Reliance Communication climbed 2.4% on news it will launch another version for its wireless Internet in rural areas, Bharti Airtel rose 1.4% and Idea Cellular fell 0.9%.