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Companies buzz, advance tax collection zooms

Strong advance tax collection numbers from the country’s leading firms on Wednesday cemented the hopes of a sustained broad based growth in the economy. HT reports.

business Updated: Dec 15, 2010 22:56 IST
HT Correspondent

Strong advance tax collection numbers from the country’s leading firms on Wednesday cemented the hopes of a sustained broad based growth in the economy. Taxing climb

Reliance Industries Limited (RIL), Tata Steel, Tata Consultancy Services (TCS), Hindalco and State Bank of India (SBI) are among those who paid higher advance taxes for the third quarter, the deadline for which ended on Wednesday.

Companies pay advance tax every quarter based on their projected income of the year.

Higher advance tax collections indicate that companies are confident of generating more income, and that their sales are growing.

The finance ministry’s mid-year economic analysis tabled in Parliament earlier this month projected that the economy could grow by 9% this fiscal, buoyed by a strong rebound in the farm sector and a robust services sector growth.

India’s GDP has grown by 8.9% during the first six months of this fiscal year, making it the second-fastest growing economy in the world, behind only China’s expected 9% growth in 2010. It grew 7.4 % last year.

India’s annual factory grew by 10.8% in October — the fastest pace in three months — propelled by a higher purchase of consumer durables such as televisions, refrigerators and cars and also by stronger capital goods output.

Consumer durables output grew by 31% during the month from 10.9% in the previous month while capital goods output growth rebounded to 22% from a contraction of 4.1% in September.

Experts said that demand is consolidating and not slowing very sharply.

“Overall, we expect a moderation in the headline IP numbers, with industrial output growth averaging 8.4% in the current fiscal year,” said Sonal Varma of Nomura.