Bihar: Internal revenue takes a hit post liquor ban

  • Anirban Guha Roy, Hindustan Times, Patna
  • Updated: Aug 05, 2016 12:36 IST
The government’s biggest revenue earners, commercial taxes and VAT, have shown declining trends. (Photo for representation)

It’s official now. The Bihar government has started feeling the pinch of losses from prohibition with the state’s internal revenue showing a slide in the first quarter of the fiscal 2016-17. The state’s expenditure on development activities under plan head is also low with only 8.99% funds spent against the budget provisions whereas 17.87% has been spent on non-plan head.

In revenue earnings, the state generated Rs 4,077.31 crore in the first quarter of this fiscal whereas the internal revenue in corresponding period last year was Rs 6,091 crore - showing a decline of 33.06%. The figures have come up in the latest report of fiscal performance trends for the first quarter laid in the state assembly by state finance minister Abdul Bari Sididqui, on Wednesday.

The government’s biggest revenue earners, commercial taxes and VAT, have shown declining trends. In the first quarter, Rs 2,372 crore was collected against Rs 3,666 crore in the corresponding period last year, a decline of 35.30%.

However, the transport and registration departments have contributed a big share in the state kitty. A sum of Rs 874 crore came from registrations against Rs 862 crore in the same period last year, registering a rise of 1.47%, while road tax has generated Rs 276 crore in Q1 against Rs 250 crore last year, showing a rise of 10.10%. Earnings from excise have dropped drastically.

Evidently, the fiscal trends indicate the state government’s big challenge to mop up more resources following the liquor ban even though the government has set a target of generating Rs 31,000 crore from internal resources.

The government has already increased tax slab on various goods and VAT by amending the commercial tax law while the fiscal deficit cap under FRBM (fiscal responsibility budget management Act) has been raised from 3% to 3.5% for higher market borrowings.

However, the government got a breather with Bihar’s share from central taxes showing a rise by 8.84% in the first quarter. The state has received Rs 11,835 crore against Rs 10,874 crore last year in the same period. But, central grants to the state have declined from last year by 14.92% in QI.

The state received Rs 4,660 crore in first three months of this fiscal against Rs 5,477 crore in Q1 last fiscal. In totality, the government has spent Rs 19,119 crore out of the total budget of Rs 1,44,696 crore for the current fiscal, the report said.

Besides, the finance minister also laid the achievement report for 2015-16 fiscal and the performance trends report for the last quarter of previous fiscal in the state assembly, as mandated under the FRBM Act.

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