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Good news for economy: FDI inflow soars; indirect tax kitty up

Discussion in 'World Economy' started by DaRk KnIght, Jan 10, 2012.

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  1. DaRk KnIght

    DaRk KnIght Lt. Colonel ELITE MEMBER

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    Good news for economy: FDI inflow soars; indirect tax kitty up - The Times of India


    NEW DELHI: Foreign direct investment (FDI) into India went up by an impressive 56 per cent to $2.53 billion in November 2011, signalling improvement in investor sentiment.

    The cumulative flows of $22.83 billion for the April-November period have crossed $19.43 billion which came in the full fiscal of 2010-11, according to officials.

    Analysts feel that if the trend continues, the FDI in the current financial year would well cross $30 billion, a development which will have a positive effect on rupee in the foreign exchange market.

    In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15 per cent since August.

    While the FII inflows are considered "hot money", the FDI is quite stable.

    The improvement in FDI inflows in November comes after two months of declining trend. The country had received $ 1.62 billion overseas investment in November 2010.

    In September and October, the inflows were down by 16.5 per cent and 50 per cent year-on-year respectively.

    During the April-November period, the FDI was up by 62.81 per cent from $14.02 billion a year ago.

    "At this rate we would be able to cross $30 billion figure by end of the current fiscal," the official added.

    In 2010-11, FDI into equity had dipped 25 per cent to $19.43 billion, from $25.6 billion in 2009-10. In 2008-09, FDI stood at $27.3 billion.

    Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India.

    Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate.

    Indirect tax collection

    Belying concerns over slowdown, indirect tax collections increased 16.1 per cent to Rs 2,85,787 crore during April-December mainly driven by an uptick in service tax mop-up.

    Total collection of indirect tax -- Customs, Central Excise and Service Tax -- was Rs 2,46,168 crore in the same period last year.

    "We hope we will be able to meet the Budget Estimates of Rs 3,92,908 crore (from indirect taxes) this fiscal," chairman of Central Board of Excise and Customs (CBEC) S K Goel told reporters while releasing the data.

    The indirect tax collection in three quarters of 2011-12 is about 72.7 per cent of the Budget Estimates.

    The collection has shown a growth despite Rs 36,000 crore revenue forgone on account of customs and excise tax cut on petroleum products. The levies were slashed in June to provide a cushion to consumers against hike in prices of diesel, kerosene and LPG were hiked.

    The tax mop up in December was Rs 34,819 crore, up 15.9 per cent from Rs 30,054 crore in the year ago period.

    "December has given a positive news particularly on the Central Excise front, as the collection increased by 9.7 per cent to Rs 12,546 crore (year-on-year)," Goel added.

    The growth in excise collection is a positive news, he said as the mop up had declined by 6.5 in November and by 8.7 per cent in September. It had shown a growth in October.

    Goel further said that Service Tax collection continues to be strong and has shown 48.6 per cent expansion in December to Rs 9,665 crore from the year ago period.

    There has been concerns on the economic growth prospects of the country in wake of high cost of credit coupled with global scenario. The economy is expected to slow to about 7 per cent this fiscal, against 8.5 per cent in the previous year.
     
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