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UP claims tax collections up, earning-expenditure gap remains
The state government’s non-tax revenue also increased to Rs 182.33 crore in September 2020 against Rs 120.89 crore in the same month in 2019.
The Uttar Pradesh government on Monday claimed an increase in its tax collections for the third consecutive month, collecting Rs 890.26 crore more as taxes in September 2020 vis-à-vis the tax earnings in the same month last year.
Although this indicates an increase of about 10.5 percent in tax collections for September 2020, a wide gap of about Rs 13,000 crore remains in revenue collections in the first six months of 2020-2021 in comparison to the earnings during the same period in 2019-2020.
“We have collected Rs 9,334.17 crore as taxes in September 2020. This is 890.26 crore higher than tax collections of Rs 8,443.91 crore made in the same month in 2019. This is the third consecutive month of increase in earnings,” said state minister for finance Suresh Khanna while speaking to media.
The state government’s non-tax revenue also increased to Rs 182.33 crore in September 2020 against Rs 120.89 crore in the same month in 2019. With this, the state government’s total revenue collection in September 2020 has gone up to Rs 9516.50 crore, about 80.2 percent of revenue earning target of Rs 11,873.17 crore for September 2020.
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“We hope for further increase in revenue collections in coming months, including in October 2020,” said additional chief secretary, finance, Sanjiv Mittal.
“An increase in revenue is a good sign. It indicates that the state’s economy is on the road to recovery. But the state government will have to make more efforts to mobilise more revenue to provide funds for development and should not hesitate to go for extra borrowings from the market,” said Yashvir Tyagi, retired professor, department of economics, Lucknow University.
A close scrutiny of the state government’s performance on the financial front, however, indicates that although its total revenue earnings have increased consistently, they have remained behind targets in the past three months. Moreover, the tax earnings in September 2020 are less than the earnings in July and August 2020.
As per the state government’s statistical data, it earned a total revenue of Rs 10,675.42 crore in July 2020 and Rs 9,545.21 crore in August 2020 against Rs 9516.50 crore in September 2020.
Moreover, the state government’s major revenue earning departments have failed to achieve their targets during the first six months of 2020-2021 due to the impact of Covid-19.
“The state government collected revenue of about Rs 45,890 crore from April 1, 2020, to September 30, 2020, against Rs 58,600 crore earned during the same period in 2019-2020. Lower collections are obviously a result of Covid-19,” said a senior officer.
The government’s revenue in the past three months has apparently increased due to hike in excise duty on liquor and the rate of VAT on petrol and diesel, etc. In September 2020, too, the highest increase was witnessed in excise collections. The state government collected excise of Rs 2,140.61 crore, about 95.1 percent of Rs 2,250 crore target for the month.
As the government spends Rs 12,000 crore to Rs 13,000 crore every month on payment of salaries and pension to its employees, the total revenue earnings remain insufficient to meet the committed expenditure.
