Recent reduction in crude prices might have been good news for the common man, but for state finance and industries minister Amit Mitra, it brought home his worst fears.
Since the reduction in the prices of petroleum products, the state government has fallen further behind in the race to meet its revenue generation target from sales tax and state surcharge. Far from closing in on the targeted figure, the state could be staring at a deficit of Rs. 10,000 crore with regard to tax revenue for the financial year 2014-’15.
The state’s budget estimate with regard to tax revenue for the current fiscal had been pegged at Rs. 45,413.96 crore, up from the revised estimate figure of Rs. 39,000 crore for financial year 2013-’14.
According to sources in the finance department, till January 31, 2015, the state’s own tax revenue collection had not even crossed Rs. 35,000 crore. At this rate, the state isn’t likely to make enough ground in the last two months of this fiscal and reach anywhere near its targeted figure with regard to tax revenue.
Economists believe the state’s estimated revenue generation figure for the current fiscal was likely set in the hope that crude prices would trend as high as it did during the days of UPA I and UPA II regimes at the Centre.
“Back then (during UPA days), Bengal drew tangible benefits in terms of raking in more revenue from sales tax and surcharge on petroleum products. Now it’s clear that the (tax) revenue target for the financial year 2014-’15 was set without careful consideration of the fact that the deregulation policy made petroleum prices susceptible to market forces thus entailing the possibility of a decline in prices of petroleum products following the global trend. The same would automatically reflect in the decline in collection from sales tax and surcharge on these products,” a city-based economist told HT.
Sources said another factor that could likely contribute to the deficit in tax revenue collection is the poor return from entry tax and the levies on goods and passengers.
“The finance minister had set sights on collecting Rs. 1,651.54 crore during 2014- 15, up from the revised estimate figure of Rs. 1,435.91 crore during financial year 2013-’14.
However, from the trends so far, the state isn’t likely to meet the entry tax target for the fiscal under review,” an official of the state finance department told Hindustan Times.
The finance minister is to present the state budget for fiscal 2015-’16 on February 27, a day ahead of the Union budget. The move to present the budget a day ahead of the Centre’s got many to voice surprise saying the state’s planned outlays and proposals wouldn’t be devised in the light of tax devolution and central grants.
Mitra, in his budget speech for 2014-’15, projected the state’s total accumulated debt to touch Rs. 2.75 lakh crore by March 31, up from Rs. 2.50 lakh crore on March 31, 2014.