Core sector output down, may hit GDP and tax collection

Dip in production of finished steel, natural gas, crude oil and refinery items

GN Bureau | April 1, 2015


#financial year   #core sector   #steel   #coal   #GDP   #direct tax   #IT  

India enters new financial year with a bit of bad news on economic front. Latest figures show that the core-sector output grew at 1.4%, the slowest pace in 16 months, in February and that the direct tax collection target is going missed.

Except for coal production, the core sector has been hit due to dips in production of finished steel, natural gas, crude oil and refinery items. This raises concern over the pace of industrial recovery and there is a possibility that the last quarter GDP growth could be a bit less than 7.4%.  The economy grew by 6.5% in Q1, 8.2% in Q2 and 7.5% in Q3.

The expansion of the eight core-sector industries was also subdued in January at 1.8%. The February growth in eight core-sector industries, which have a total weight of 38% in the index of industrial production, was the slowest after -0.1% growth reported in October 2013.

The steel output contracted 4.4% in February after growing 1.6% in January. Crude output shrunk by 1.9% in February, a trend observed since November 2014. Natural gas and refinery products output declined 8.1% and 1.0% respectively.

However, coal production jumped by 11.6% in February while cement and electricity production increased by 2.7% and 5.2% respectively.

Meanwhile, the government’s direct tax mop-up is set to miss the revised target for 2014-15, as the collection so far has been only Rs 6,30,000 crore.

The IT department may not be able to achieve even the revised target. The government had revised its target downwards to Rs 7,05,000 crore for the current financial year, after initially having budgeted Rs 7,36,000 crore in the direct tax mop-up.

The lower than projected target of direct tax collection is being attributed to certain sectors like manufacturing which have not been able to do well in the sluggish country's economic growth.

Comments

 

Other News

Bank loan recovery in recent years has mirrored Hindu rate of growth

At the outset, for those who are not familiar with the nomenclature ‘Hindu Rate of Growth’, it refers to the low economic growth in post-independent India till the 1990s, when several economic liberalisation measures were undertaken. Till the 1990s, the growth rate was around 4%, which accelera

“Indian Navy needs more capabilities to build ships”

As India faces increasing threats from China and Pakistan on sea, Vice Admiral Ajendra Bahadur Singh, Flag Officer Commanding-in-chief (FOC-in-C), Western Naval Command, has said that the Indian Navy needs to scale up its capabilities and have more budgets allocated. Speaking to members of t

Mumbai issues strict guidelines for home quarantine of all international passengers

In view of the emerging threat of the new coronavirus variant, Omicron, the BrihanMumbai municipal corporation (BMC) Saturday issued strict guidelines for surveillance of all international travellers arriving in the metro and especially those from ‘at risk’ nations. Outlining SO

Omicron: Maharashtra revises travel guidelines

A day after the union health secretary wrote to it that its order on SOPs for air travellers was in divergence with guidelines issued by the MoHFW, GoI in view of the Omicron threat, the Maharashtra government on Thursday revised its guidelines for passengers arriving in the state. Issuing

Omicron: Centre asks Maharashtra to follow uniform guidelines

With the threat of Omicron, the new variant of the coronavirus, looming large, the union health ministry has written to the Maharashtra government to align orders issued by the state with the ministry’s guidelines for uniform implementation. The state government in its order dated Nove

Central Railways runs over 800 Kisan Railway trips

To ensure bigger access to farm produce and provide new markets with quick transportation and subsidy at 50%, the Kisan Rail has been bringing prosperity, joy, and hope to farmers of Maharashtra. On November 28, the Central Railway ran its 800th  trip of Kisan Rail from Sangola to Muzaffarpur.

Visionary Talks: Dr. Naresh Trehan, CMD Medanta Heart Institute with Kailashnath Adhikari



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter