Hike in taxes after Covid increases Andhra Pradesh revenue

Amaravati: The various taxes and levies, hiked in the name of Covid-19 last year, seem to be paying off as the Andhra Pradesh government earned an extra 12,052
Hike in taxes after Covid increases Andhra Pradesh revenue
Hike in taxes after Covid increases Andhra Pradesh revenue
Published on Oct 18, 2021 12:50 AM IST
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ByPress Trust of India

Amaravati: The various taxes and levies, hiked in the name of Covid-19 last year, seem to be paying off as the Andhra Pradesh government earned an extra 12,052.29 crore in tax revenue in the first five months of the 2021-22 financial year.

The state’s total revenue was an extra 15,688.46 crore from April to August this year, compared to the corresponding period last year, state accounts by the Comptroller and Auditor General revealed.

At the same, the state almost exhausted its targeted borrowing estimate, securing loans of 36,976.93 crore (99.86 per cent) in the first five months itself.

As per CAG accounts, AP’s revenue from April to August was 53,159.11 crore, compared to 37,470.65 crore last year.

While tax revenue increased by over 12,000 crore, non-tax revenue too showed a spike of 423.12 crore and Central grants by 3,213 crore.

But, the revenue deficit mounted to a staggering 31,188.49 crore in five months against the annual target of only 5,000 crore.

Capital expenditure, however, took a dip from 8,608.64 crore last year to 5,482.53 crore this year, indicating the state spent 3,125.76 crore less on development works.

At the same time, the revenue expenditure, which includes numerous freebie doles, shot up to 84,347.60 crore as against 75,669.98 crore in the corresponding period last year.

Citing loss of revenue due to the Covid-19-induced lockdown last year, the state enhanced various taxes to fetch an additional 20,000 crore revenue per annum.

Among the additional levies were a 4,500 crore ‘prohibition tax’ on liquor, 600 crore revised tax on petrol and diesel, another 600 crore (road development) cess on petrol and diesel, 300 crore levy on natural gas, 2,000 crore tax on properties in urban local bodies and 350 crore ‘user charges’ on garbage.

The land values in urban areas have been hiked by 10 to 30 per cent to realise an additional 800 crore. The professional tax was increased for an additional income of 161 crore.

“We are now reaping the benefits of the tax hike but the mounting revenue deficit is still a worrying factor. The revenues may be looking good but we are still in the red,” a top finance official pointed out.

Besides, the spiralling revenue expenditure was also a cause for concern, with interest payment (on loans) alone touching 8,187.12 crore in the first five months.

“Bulk of our revenue is going towards salaries, pensions and loan repayments. Not a single rupee is available for any other thing, leave alone development works. We are borrowing heavily to keep the freebie schemes going and that is reflecting in our accounts,” the official said.

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Sunday, November 28, 2021