India faces first fall in direct taxes in at least two decades: Report

India’s corporate and income tax collection for the current year is likely to fall for the first time in at least two decades, over half a dozen senior tax officials told Reuters, amid a sharp fall in economic growth and cut in corporate tax rates.

Prime Minister Narendra Modi’s government was targeting direct tax collection of 13.5 trillion rupees ($189 billion) for the year ending March 31 - a 17% increase over the prior fiscal year.

However, a sharp decline in demand has stung businesses, forcing companies to cut investment and jobs, denting tax collections and prompting the government to forecast 5% growth for this fiscal year - the slowest in 11 years.