Govt alarmed as revenue collection dips

Ruchika M Khanna

Tribune News Service

Chandigarh, May 29

The state’s revenue growth for April — the first month of the fiscal — is less than last year.

A little over four per cent growth (as against over five per cent growth in April, 2015) in the states’taxes is a cause of concern in the corridors of power. The shortfall is pronounced as the state has embarked on a “sop giving” spree ahead of the Assembly polls. April is a revenue grosser as taxes from the sale of foodgrains add to the state coffers.

In spite of an impressive growth in Value Added Tax during the first month, the overall revenue growth has been rather slow.

While growth in VAT collection is an impressive 9.6 per cent, the stamp duty collection and revenue from transport has dipped by almost eight per cent in April as compared to the corresponding period last year.

Even excise collection has been much less than expected. This is mainly because of slow allotment of liquor vends and poor off take of liquor by the newly included super wholesale licensees.

The only saving grace for the government seems to be the VAT collections. The Excise and Taxation Department had done an analysis of 20 sectors where the VAT collections had dipped from April 2015 to January 2016.

They found negative growth in seven sectors - sale of foodgrains, tobacco, hosiery items, molasses, electronics and mobile phones. Following a district survey of these sectors and plugging loopholes in VAT collections, especially in sectors where lump sum VAT is to be paid like brick kilns, the department managed to turn around the VAT collection.

From less than two per cent increase in VAT collection in April 2015 to January 2016, VAT collection between February to April this year have shown an increase of almost 10 per cent.

The issue of how to increase taxes in other departments was discussed during a meeting chaired by Finance Minister Parminder Singh Dhindsa on Thursday. While reviewing the state of finances and the tax collection, the additional outgo required during this year (Rs 1,400 crore arrears of dearness allowance and new DA to be paid to employees; the hike in social security pensions and power subsidy to agriculture sector because of new tubewell connections) was also discussed.

All these departments have now been asked to shore up their earnings so that they attain at least the targeted growth.

This year, the government hopes to collect Rs 253 crore from Punjab Roadways and Rs 2,700 crore from stamp duty and registration of property.