Bihar’s internal revenue slides after liquor ban

A year since liquor ban, Bihar’s revenue collection has declined by Rs 1,738 crore. The excise revenue has plummeted from Rs 3,141 crore in 2015-16 to Rs 29 crore in 2016-17.

Patna Bihar’s revenue collection dipped by Rs 1,738 crore in 2016-17 as compared to 2015-16 — a year after it was declared a dry state on April 5 last year.

Against Bihar’s revenue collection of Rs 25,449 crore in 2015-16, it could generate Rs 23,711 in 2016-17.(HT photo)

Against the state’s revenue collection of Rs 25,449 crore in 2015-16, Bihar could generate Rs 23,711 in 2016-17. Notwithstanding the decline in revenue, it has set an ambitious target of mopping up Rs 32,000 crore this fiscal (2017-18).

The decline in overall revenue was contrary to public perception that the slide would be Rs 5,000 crore post liquor ban, especially when excise revenue plummeted from Rs 3,141 crore in 2015-16 to Rs 29 crore in 2016-17.

Finance minister Abdul Bari Siddiqui said the trends were positive. “Internal revenue has not fallen as drastically as we had anticipated. This is a positive signal for us. We are now confident of mopping up additional revenue from other sources,” he said.

Chief minister Nitish Kumar had said at a recent public event that the state’s revenue shortfall would not be as big as people apprehended. He claimed that people were investing more on consumables and goods, offsetting the loss in excise revenue and contributing more through other buys.

The state has done well to compensate the loss in excise revenue from other sources. The four sectors, which have performed well, are commercial taxes, vehicle registration, land revenue and registration of land.

Data shows, the state earned Rs 18,502 crore from commercial taxes in 2016-17 as against Rs17,121 crore in 2015-16 — a jump of Rs 1,381 crore. The increase in VAT on diesel and petrol, apart from large number of packaged items and sweets above Rs 500 per kg, has helped the state mop up additional revenue from commercial taxes.

Fee collected from land and flat registration yielded Rs 2,981 crore in 2016-17 as against Rs 3,408 crore in 2015-16, indicating a slight decline in volume of registration of land and flats in the state, more due to rise in circle rate of land or MVR (minimum value register).

Transport sector has done well, with registration of vehicles fetching Rs 1,226 crore in 2016-17 as compared to Rs 1081 crore in 2015-16. Land revenue (in terms of land rent or mutation fee) yielded Rs 971 crore last year as against Rs 695 crore in 2015-16.

Incidentally, collections from other sources like fine against traffic violations, sale of forms and other fees has also increased from Rs 1,214 crore in 2015-16 to Rs 1,320 crore in 2016-17.

“Compensating the loss from liquor is a big challenge but we are trying to tap all potential sources to mop up revenue to keep our fiscal health robust. Things will improve once GST is implemented,” said a senior officer in the finance department.

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“Compensating the loss from liquor is a big challenge but we are trying to tap all potential sources to keep our fiscal health robust. Things will improve once GST is implemented”