State’s revenue plummets, welfare, dvpt to take hit
The latest preliminary report by the accountant general (AG) of Maharashtra has bad news for the statemumbai Updated: May 23, 2016 23:58 IST
The latest preliminary report by the accountant general (AG) of Maharashtra has bad news for the state. Reason: It will hamper development work substantially. Contrary to the government’s budgetary claims, the report has highlighted a shortfall of Rs14,820 crore in the revenue estimated in 2015-16, including a major dip in collection from sales tax, excise and the sale of premium/FSI from the real estate sector.
As the shortfall was not anticipated in the budget this year, it will have a cascading effect on the development budget even in the current fiscal, forcing the government to initiate a major cut on expenditure on projects, including health services and education, construction of roads and maintenance of public buildings. The bad financial position had forced the government to cut planned expenditure by 30% and unplanned expenditure (outlay for salaries and other recurring expenses) by 10% to arrest the gap between expenditure and revenue. The government could spend Rs36,984 crore against the planned estimate of Rs47,478 crore earmarked for development works.
According to a preliminary statement released by the AG, the sales tax collection until March 31 was Rs69,661 crore against the estimated target of Rs74,616, while the excise could reach Rs12,469 crore against the target of Rs13,500 crore. Similary, a slump in real estate, meant the government failed to reach an estimated revenue of Rs6,067 crore. Other major heads of the revenue receipts, including vehicle taxes, stamps and registration, performed to expectations.
This means the shortfall of last year’s revenue may add to the 2016-17 deficit, which is estimated to be Rs3,644 crore.
Sensing the worsening financial position in fiscal 2016-17, chief minister Devendra Fadnavis had convened a meeting of heads of all key departments, asking them to pull up their socks for resource mobilisation.
Surprisingly, the finance department could not foresee the shortfall in March, when the government presented the budget because its revised estimated figures for sales tax and excise were kept intact.
“Generally the figures are revised sensing a shortfall at the end of the year during the presentation of the budget, but the government could not dare to revise it because it could have widened the deficit. Sales tax has always outperformed the target in the recent past. This is the first time it has failed to achieve the target. A shortfall in the excise target is attributed to a liquor ban in Chandrapur where the loss of revenue from the district is more than Rs300 crore,” said an official from the finance department.
The deficit in revenue receipts, however, did not affect the budget deficit limiting it at Rs9,290 crore, owing to the expenditure reduced by about Rs17,000 crore in the fiscal. “Planned expenditure was cut by 30%, while unplanned expenditure was cut by 10%, which helped the government keep the deficit in check, otherwise it would have been much more. The real worry is next year because the targets set for sales tax and excise and other departments are difficult to achieve,” the official said.
On the backdrop of the widening gap between the targets set and the actual receipts, Fadnavis asked officials to tap into resource mobilisation measures.
“Besides, sales tax and excise, the collection from the premium and sale of FSI/TDR was just Rs1,007 crore against the target set for the receipts of Rs6,067 crore. The CM reviewed the situation and discussed the measures needed to be taken for the receipts from the housing and urban development sector. He has directed the head of various departments to mobilise the resources,” said a senior officer from the CMO, on the condition of anonymity.
DK Jain, additional chief secretary, finance department said, “The CM took review of the financial situation and the measures to be taken to mobilise resources. I would not be able to comment on the shortfall of the receipts because I have recently taken the charge of the department.”