Barely four months are left for the financial year to end and the government has reached only the halfway mark of its tax revenue collection target.

After admitting to possible slippages in its fiscal deficit and disinvestment targets, the finance ministry is now jittery about its tax collection target too.

If that is also missed, it will be the third time in four years that the Budget target is missed.

According to finance ministry officials, direct tax collections could be around Rs 5,00,000 crore (Rs 5 trillion) by the end of the current financial year, while indirect tax mop-up could be in the range of Rs 3,85,000 crore (Rs 3.85 trillion) to Rs 3,90,000 crore (Rs 3.9 trillion) -- an overall shortfall of about Rs 40,000 crore (Rs 400 billion).

This may exert further pressure on fiscal deficit, which could go above the Budget estimate of 4.6 per cent.

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With extra expenditure having been incurred and a shortfall in non-tax revenue target likely, the ministry was banking heavily on tax collections, so much so that targets for revenue boards had been increased by 10 per cent to make up for the unrealised revenue from the government's disinvestment programme.

In the first eight months of this financial year, total tax collections stood at only 52.4 per cent, or Rs 4,87,877 crore (Rs 4,878.77 billion), of the Budget Estimate (BE) of Rs 9,30,467 crore (Rs 9,304.67 billion).

Of this, direct tax mop-up was 44 per cent, or Rs 2,35,333 crore (Rs 2,353.33 billion), of the Rs 5,32,651-crore (Rs 5,326.51 billion) BE. Indirect tax collections fared a little better, achieving about 63 per cent, or Rs 2,52,544 crore (Rs 2,525.44 billion), of the estimated Rs 3,97,816 crore (Rs 3,978.16 billion).

The revenue department now has a mammoth task of collecting over Rs 1,10,000 crore (Rs 1,100 billion) per month in the remaining part of 2011-12, if it has to meet the Budget Estimate.

The required mop-up per month would shoot up by another Rs 14,000 crore (Rs 140 billion) if it has to meet the revised target of about Rs 9,85,000 crore (Rs 9,850 billion).

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The heads of the Central Board of Direct Taxes (CBDT) and the Central Board of Excise & Customs (CBEC) have already conceded that the targets, especially the revised ones, would be difficult to achieve.

If past records are anything to go by, the BE might also be missed. Last year, when the government exceeded both its BE and RE, about 56 per cent of the total target had been achieved by November.

In 2009-10 and 2008-09, when the targets were missed, only about 50 per cent of the target had been met till November.

However, a closer look -- at both direct and indirect tax mop-up so far this year -- tells more than what meets the eye.

The growth of net direct tax collections is not as bad as it appears, because the CBDT has frontloaded refunds this year.

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The department has already cleared tax refunds of over Rs 72,000 crore (Rs 720 billion) and another Rs 20,000 crore (Rs 200 billion) is likely to be given in the next four months. These had stood at Rs 57,000 crore (Rs 570 billion) in 2009-10 and Rs 39,000 crore (Rs 390 billion) in 2008-09.

Moreover, advance tax collections for the third and fourth quarters would reflect in the December and March numbers.

So, direct tax collections are expected to get somewhat better from here. On the other hand, going forward, indirect tax collections are expected to falter.

A major area of worry for the ministry is central excise collections, which have declined 6.5 per cent from those in the same month last year.

An indicator of economic activity, excise duty may slip further, as industrial output has been slumping. It dropped 5.1 per cent in October.

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Another reason for a slowdown in indirect tax collections is the cut in duties on petroleum products in June, which resulted in a loss of Rs 38,000 crore (Rs 380 billion) to the government in the remaining part of 2011-12.

The government had removed the Customs duty of 5 per cent it levied on crude oil, brought down import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and on other petroleum products to 5 per cent from 10 per cent.

It also abolished the Rs 2.6 per litre basic excise duty on diesel. Service tax collections, continuing the high growth trajectory, have emerged as a face-saver for the revenue department.

The growth, however, does not mean much, as the estimated revenue from service tax comprises only about 20 per cent of the total indirect tax collection target, compared with 41 per cent from excise and 39 per cent from Customs.

Another reason for a slowdown in indirect tax collections is the cut in duties on petroleum products in June, which resulted in a loss of Rs 38,000 crore (Rs 380 billion) to the government in the remaining part of 2011-12.

The government had removed the Customs duty of 5 per cent it levied on crude oil, brought down import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and on other petroleum products to 5 per cent from 10 per cent.

It also abolished the Rs 2.6 per litre basic excise duty on diesel. Service tax collections, continuing the high growth trajectory, have emerged as a face-saver for the revenue department.

The growth, however, does not mean much, as the estimated revenue from service tax comprises only about 20 per cent of the total indirect tax collection target, compared with 41 per cent from excise and 39 per cent from Customs.