Tax revenues grew 26.7 per cent to Rs 4,66,163 crore (Rs 4661.63 billion) in April-February 2007-08, compared with Rs 3,67,719 crore (Rs 3677.19 billion) in the corresponding period of the previous fiscal.

This is higher than the 23.6 per cent growth rate needed to reach the revised Budget estimate of Rs 5,85,410 crore (Rs 5854.10 billion) for 2007-08.
Tax collections are expected to be between Rs 5,86,000 crore (Rs 5,860 billion) and Rs 5,95,000 crore (Rs Rs 5950 billion) in 2007-08, sources say.

Achieving the revised estimate for the fiscal will mean that the March collections have to be Rs 1,19,247 crore (Rs 1192.47 billion). The collection trends indicate that any difficulty in meeting the target is unlikely.

"Direct tax collections are expected to be close to Rs 80,000 crore (Rs 800 billion) in March while Rs 40,000 crore (Rs 400 billion) to Rs 50,000 crore (Rs 500 billion) is expected from indirect taxes due to good service tax and customs collections," said a source.

Growth in excise duty collection, however, remains sluggish at 6 per cent. The growth rate needed to achieve the revised Budget estimate of Rs 1,27,947 crore (Rs 1279.47 billion) collections for 2007-08 is 8.7 per cent.

Robust Customs duty collections despite a lower rate on various items to contain inflation indicate a volume growth. The growth rate on this account in the first 11 months of 2007-08 was 19 per cent.

Moreover, the buoyancy in direct tax collections continues. Corporation tax collections grew 37 per cent while the mop-up from income tax was up 42 per cent during the period under review.

Due to the overall buoyancy in tax collections in 2007-08, the fiscal deficit and revenue deficit situation has improved over the corresponding period in 2006-07.

Fiscal deficit stood at 73.4 per cent of the annual target in April-February of 2007-08, compared with 80 per cent in the same period of the previous fiscal. The figure for revenue deficit was 86.6 per cent as against 98.8 per cent a year ago.