Economy

Economy bouncing back sooner than expected: Finance Secretary Pandey

KR Srivats New Delhi | Updated on July 23, 2020

Finance Secretary Ajay Bhushan Pandey

India’s global growth share projected to rise to 15.5 per cent.   -  Getty Images/iStockphoto

'I-T, GST collections in Q1 encouraging'

Encouraged by robust tax collections in the first quarter of the current fiscal, Finance Secretary Ajay Bhushan Pandey has said the economy was poised for a smart rebound, sooner than what was anticipated when the lockdown was imposed in end-March.

Echoing similar sentiments, Economic Affairs Secretary Tarun Bajaj said the country is well on course to record V-shaped recovery next fiscal year. Both were speaking at a FICCI-organised conference on Capital Markets here.

 

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Tax collections up

In the first quarter, the total income tax collections — advance tax and TDS — stood at 80 per cent of the levels collected in the same period last year, Pandey said.

This, and the relatively good GST collections in June (about ₹90,000 crore), are clear pointers that businesses are getting back to normal even as several sectors such as hospitality, travel, tourism, hospitals continue to be severely hit, he said. The robust GST collections point to decent manufacturing and business activity in May, given that at least 60-70 per cent of the mop-up in June pertained to May.

Pandey highlighted that corporate assessees, in the first quarter of last year, worked on a higher corporate tax rate of 30 per cent before the the tax rate was cut in September. However, in the first quarter of this year, at reduced tax rate, the collections were still around 80 per cent of last year’s level, which is quite good.

Earlier, in a separate session, Bajaj said June and July were more promising than envisaged on the economy front. “Unless Covid hits us very badly and we have to change our strategy in the middle, which seems very unlikely, I am expecting a V-shaped recovery. This year may be a lost year for us, but this doesn’t mean it will continue in the next year or the year after. I am very confident that we should be back to our growth journey from next year,” Bajaj said.

He said the Centre’s revenue figures were fairly goodand the devolution to the States, in the first two months of this fiscal, is in line with last year’s levels. For June and July, the devolution to the States was down by 10 per cent, Bajaj added. “We are not as stressed on this front as it appears to be,” he said.

Prime Minister Narendra Modi had, on Wednesday, while pitching for higher foreign investment in India said “There has never been a better time to invest in India!”

Addressing India Ideas Summit hosted by the US-India Business Council, he highlighted the fact that India has attracted foreign investment of more than $20 billion between April and July.

Published on July 23, 2020

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