It has been nine months of NDA Government and the early revenue figure for the said period indicates uplift in business sentiments. The effort of Modi government results in highest growth in manpower recruitment, supply services and also in providing consultancy service and engineering knowhow.   

The period from April to December of 2014-15 has enmarked a growth in service tax collection. In the said period, the tax collection was Rs. 1.20 lakh crore and that was Rs. 1.10 lakh crore in the last year. The contribution of business support services was 24 percent and manpower recruitment agencies have 23 per cent. These sectors had the highest contribution in this growth.

This figure indicates that there had been increase in employment which was much awaited for the growth of the country. But the truth behind the good figure is not the increase in direct employment. The big multi national companies (MNCs) and Indian corporate have adopted the custom of contract employment. Through this contract, companies are hiring even the specialized skilled services. This contract has the clause of hiring and firing of employees at the will of the employer. A notice received is enough for the employees to lose their job. As the companies are under no obligations, they withdraw the employees without any hesitation.

Through this we can understand the facts behind the rise in contribution from manpower recruitment sector. Though the rise in contribution figure looks good but the truth may be bitter.

Passengers embarking on domestic and international journeys had paid the service tax which turned up to the 20% growth from last year. People are getting more customized of using debit/ credit cards. Tax collected on these services had marked a growth of 22%.

The collection from security and detective agencies was Rs 2,076 crore, more than 17 per cent compared to last year’s Rs 1,770 crore.

There are many sectors which are contributing to the rise in service tax collection. But not to forget those sectors which are not contributing much or sectors which are far behind in the race.

One of such is the insurance industry which collected Rs. 3,072 crore up to December. This was Rs. 3,481 crore in the last fiscal year. When we turn to the general insurance services, we find he growth of mere 3% which is very low.

Real estate sector faces a downward track of 12%. Up to December, the collection was Rs. 2,694 crore and the last year it was Rs. 3,054 crore.

The government has allowed many additional concessions in tax but the benefit from these are not up to the expectation. The rise in service tax collection includes the contribution from few sectors only and also includes some fictitious growth as in from employment sector.

Rise in service tax collection is surely good news for the Modi government but the real factors behind this shall not be neglected. Real growth in every sector is essential for the ultimate growth of the economy of the country.