Hopes for a broad-based corporate recovery have sprung anew with strong advance tax collections from country’s leading firms amid applause from stock markets.
The Bombay Stock Exchange’s benchmark Sensex closed at a 15-month high of 16,454 points, adding over 240 points after reports on advance tax payments started trickling in during the day. The last time the Sensex closed at this level was on June 2, last year.
Net direct tax collections has increased to Rs 87,888 crore during the first five months of the current fiscal (April-August 2009-10), up 4.12 per cent compared with the Rs 84,409 crore raised in the same period last fiscal. Corporate tax
collections grew 1.84 per cent to Rs 49,339 crore from Rs 48,450 crore in the same period last year.
“The overall outlook of the advance tax payment shows that the banking firms are going to post better than expected quarterly results this time from the income from increased loan disbursal,” said Alex Mathews, head, research centre of Geojit BNP Paribas Financial Services.
There have been strong signs of an economic recovery in recent months. The country’s factory output rose 6.8 per cent in July, and triggering hopes of a strong economic rebound in the coming months.
Manufacturing, which accounts for 80 per cent of overall industrial output, also grew by 6.8 per cent.
This has raised hopes that the government would be able to meet its total corporate tax revenue target of Rs 2,56,725 crore in 2009-10.