The India story may have hit a rough patch, but the picture is not dark all around.
At least the advance tax collections for the third quarter of this financial year show some vibrancy underneath the pervasive gloom and doom.
Advance tax payments by the top 100 companies in the third quarter show deceleration in their profits.
But, mid-sized companies provide a twist in the tale.
While the collections from the top 100 companies dropped 1.4 per cent in the third quarter year-on-year, the overall mop-up from 700 companies increased 14 per cent, indicating mid-sized companies are doing better than large companies in terms of profit growth.
However, the figures should be read with caution, as large corporations fill most of the government coffers and many of the mid-sized companies may be delivering inputs to the large.
As such, the finance ministry feels direct tax collections will fall short by over Rs 32,000 crore (Rs 320 billion) this year from the Budget-estimated target of Rs 5,32,651 crore (Rs 5,236.51 billion).
Mid-sized companies need to be tapped more vigorously to provide a cushion to the economy, particularly amid the signs of a slowdown visible now, analysts say.
Sectors like cement, chemicals and fertilisers, infrastructure, software and computer did well.
Automobiles, telecom, steel, minerals and mining saw a dip in collections.
A dip in collections from mining is understandable, as the sector has witnessed a continued production fall.
Its output was in the negative zone for the third month in a row in October, down 7.2
For the first seven months of the year, mining production was down 2.2 per cent.
The auto figures were in line with expectations, too, as passenger car production fell 3.5 per cent in April-November.
Confirming what the second-quarter GDP data showed on declining investment growth in the economy, ministry officials said some of the big companies were sitting on huge cash piles and not investing.
The Gross Fixed Capital Formation, a proxy for investment, showed a downtrend for the second quarter of this year at 7.06 per cent year-on-year. It was 14 per cent in the first quarter.
Economists partially blamed high interest rates for the slow investment while blame also went to the loss in demand due to low industrial growth.
However, CARE Ratings chief economist Madan Sabnavis said, "Our growth is domestic and hence we cannot really say there has been an impact of the euro zone crisis."
Advance tax collections from the country's top 100 companies declined to Rs 30,763 crore (Rs 307.63 billion) in the third quarter from Rs 31,203 crore (Rs 312.03 billion) in the same period last year.
"Some of the larger companies, including State Bank of India, paid less advance tax in the third quarter against the year-ago period.
"Besides, oil marketing companies did not pay any tax either in the second quarter or the third quarter," a ministry official said.
The trend of small companies filling some of the gap created by large companies in advance tax collections was also seen in the second quarter, though it is more pronounced this time.
