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Direct tax growth higher in second-rung cities

P Vaidyanathan Iyer in New Delhi

Second-rung cities like Ahmedabad, Bangalore, Bhopal, Amritsar, Allahabad and Nagpur have overtaken the metros in the growth rate of direct taxes.

Although the metros still account for about 60 per cent of the direct tax collections in the first seven months of the current fiscal, the second-rung cities now hold promise for the tax department.

Ahmedabad, Bangalore, Bhopal, Pune, and Hyderabad clocked growth rates significantly higher than the overall 13.46 per cent growth in direct taxes during April-October 2002.

These five cities cumulatively collected Rs 7,312 crore (Rs 73.12 billion) or almost a quarter of the direct tax mop-up.

While collections from Ahmedabad, Bangalore and Bhopal grew 25 per cent and more, that from Pune and Hyderabad were over 15 per cent, compared to the realisations in the corresponding period last year.

Among the metros, Chennai clocked the highest growth rate of 24 per cent with collections of Rs 2,368 crore (Rs 23.68 billion).

Delhi and Kolkata fared the worst with single-digit growth rates of 4.5 per cent and 5 per cent, respectively.

Delhi collected Rs 5,223 crore (Rs 52.23 billion) and Kolkata Rs 1,589 crore (Rs 15.89 billion) during the first seven months of this fiscal.

Mumbai realised Rs 9,797 crore (Rs 97.97 billion), up 16.5 per cent compared to Rs 8,409 crore (Rs 84.09 billion) during April-October last year.

Nagpur, Amritsar, Kanpur, Jaipur and Shillong, however, registered much higher growth rates.

Though the quantum of collection from such cities is not very high, the growth rates are well over twice the overall growth, which is good news for the Central Board of Direct Taxes.

For example, direct tax collections from Amritsar during April-October this year at Rs 197 crore (Rs 1.97 billion) were 65.5 per cent higher than in the corresponding period last year.

Similarly, Nagpur logged a 56 per cent growth with Rs 312 crore (Rs 3.12 billion), and Shillong recorded a 56 per cent growth, having raked in Rs 419 crore (Rs 4.19 billion) in the first seven months of this fiscal.

The direct tax collections in the first seven months stood at Rs 32,462 crore (Rs 324.62 billion), up 13.46 per cent compared to Rs 28,596 crore (Rs 285.96 billion) in the corresponding period last year.

Of the 24 zones in all, 18 recorded growth rates higher than the overall growth. Only two cities, Meerut and Kochi, reported drops in collection of 25.65 per cent and 14.5 per cent, respectively.

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