Green Shoots of Strong Economic Recovery: Direct Tax Collection and EPFO Data Shows

Recently released direct tax collections for FY 2021-22 and EPFO data for April showed a strong resurgence of India’s economy post the 2 raging waves of COVID-19 pandemic.

While net direct tax collections has more than doubled from Rs 92,672 crore for FY2020-21 to Rs 1,85,871 for FY 2021-22 (as of 15th of June, 2021), EPFO data for April also showed strong numbers with 12.76 lakh net subscribers added during that month.

This is on back of strong exports and record FDI that India has received showing the dynamism of Indian economy.

Net Direct Tax Collections Doubles

Net direct tax collections has more than doubled from Rs 92,672 crore for FY2020-21 to Rs 1,85,871 for FY 2021-22 (as of 15th of June in both 2020 and 2021). The net Direct Tax collections include Corporation Tax (CIT) of Rs. 74,356 crore (net of refund) and Personal Income Tax (PIT) including Security Transaction Tax (STT) of Rs. 1,11,043 crore (net of refund).

Despite extremely challenging initial months of the new fiscal year (Fiscal year for India is 1st of April-31st of March), advance Tax collections for the first quarter of this fiscal year stand at Rs. 28,780 crore which is again an 146% increase over the advance tax collections of first quarter of 2020-21 which was Rs. 11,714 crore.

Strong EPFO Figures Show Job Creation

EPFO has added around 12.76 lakh net subscribers during April, 2021. This has been achieved despite the second wave of COVID-19 pandemic and in fact April 2021 registered an increase of 13.73% net subscribers addition as compared to March 2021 which saw around 11.22 lakh net subscribers being added to the payroll.

Of the 12.76 lakh net subscribers added during the month, around 6.89 lakh new members have come into the social security coverage of EPFO for the first time and around 5.86 lakh net subscribers exited and then re-joined EPFO by changing their jobs within the establishments covered by EPFO.

43% of the net subscribers added were in the 18-25 category which shows the high number of new formal jobs were created for youth. The age-group of 22-25 showed highest number of net enrolments among different age groups with around 3.27 lakh additions during the month of April, 2021.

Share of female enrolment is approximately 22% of total net subscribers addition during the month. Month-on-month analysis reveals an increasing trend in net female subscribers; 2.81 lakh females were enrolled during April, 2021 which was 2.42 lakh during March, 2021.

In addition to this, number of female subscribers who have come under the ambit of EPFO for the first time, has also increased to 1.90 lakh in April, 2021 from 1.84 lakh in March, 2021.

These strong figures in direct tax collections and EPFO is buttressed by the rising growth in exports, highest ever FDI and increasing manufacturing recorded by India recently. Through economic reforms, massive infrastructure development, meticulous fiscal balancing and large-scale relief to poor during pandemic, PM Modi is charting a robust course for India’s economic recovery in the post covid world.