Riding on the manufacturing sector’s growth in May, the Centre’s excise duty collections grew a whopping 84.2 per cent during the month at ₹21,809 crore (₹11,838 crore).

The HSBC Manufacturing Purchasing Managers’ Index had hit a four-month high in May, signalling a further robust expansion of the manufacturing sector.

Both output and new order growth accelerated to four-month highs.

For April-May 2015, excise collections increased 88 per cent to ₹38,535 crore (₹20,493 crore), clearly reflecting a pick up in manufacturing, official data released by the Finance Ministry on Wednesday showed.

There has been a sharp increase in customs and service tax collections in the April-May period.

While customs collections grew 19.5 per cent in April-May 2015 at ₹29,986 crore (₹25,094 crore), service tax collections grew 17.6 per cent for the same period to ₹27,607 crore (₹23,482 crore).

In May, customs collections grew 16 per cent to ₹15,700 crore (₹13,539 crore) and service tax collections were up 13.2 per cent to ₹12,484 crore (₹11,031 crore).

A large part of the surge in excise duty collections could be attributed to the additional measures taken by the Union Government, including an increase in central excise duty on diesel and petrol, increase in clean energy cess and the withdrawal of exemptions for motor vehicles and consumer durables.

Overall, indirect tax collections grew 39.2 per cent to ₹96,128 crore (₹69,069 crore). In May, indirect tax revenues grew 37.3 per cent to ₹49,993 crore (₹36,408 crore). Echoing the views of Finance Minister Arun Jaitley, Chief Economic Advisor Arvind Subramanian said on Thursday that these numbers show momentum in the economy and that the underlying GDP growth is “not doing badly”.

“There were three very important measures taken in relation to indirect taxes. If you strip that out and look at the underlying momentum, we find that in the period April to May 2015, compared to that last year, indirect tax collections actually rose by 12.6 per cent,” he said.

Subramanian added that the indirect tax collections are an important indicator of economic growth as “it is real money based on real underlying economic activity”.