Major revenue earning depts of state fail to meet targets

LUCKNOW: The Uttar Pradesh government’s major revenue earning departments have failed to meet tax collection targets for third consecutive month, realizing only 37.77 per cent of the targeted tax revenue from April 1 to June 30, the first quarter of 20202021, amid fight against Covid-19.

The UP government’s total tax revenue collection in first quarter (April 1 to June 30, 2020) was Rs 15,716.48 against the targeted tax revenue of Rs 41,602.68 crore.

As the collections were only 37.49% of targets on non-tax revenue front too, the UP government may have to mobilise additional resources soon, if situation fails to improve in coming months.

“We hope the situation on tax collection front will improve in coming months. More activities have been allowed now and this will generate more revenue. In June 2020 we have collected about 61 per cent revenue against targets,” said additional chief secretary, finance Sanjiv Mittal.

Mittal’s optimism is based on the fact that the tax collections in June 2020 have been considerably higher than the collections in first two months of the first quarter of 2020-2021. UP government earned tax revenue of Rs 8848.69 crore against a target of Rs 14447.47 crore from June 1 to June 30, 2020.

Chief minister Yogi Adityanath has already asked mining department to start tendering process for mining of minor minerals from October 1, 2020 to earn more revenue. In a statement in June 2020, he had exuded confidence about increase in state government’s earnings saying there was no proposal to levy any new taxes in view of upward trend in the revenue collections in UP.

Significantly, GST compensation of Rs 3092.44 crore from the Centre (Rs2259.96 crore received in June 2020 and Rs 832.48 crore received in April 2020) has come as a big help to the state government. The GST compensation has taken the government’s total available tax revenue in first quarter to Rs 18,808.92 crore though tax earnings in the period remained only Rs 15716.48 crore.

“The GST compensation for previous financial year received in the first quarter obviously has helped and payment of salaries and other dues well in time,” said senior officer of UP government.

A close scrutiny of the revenue earned in the first quarter of 20202021 indicates that excise continues to remain the highest revenue earning department after the GST while VAT remains on third place now.

The state government was able to get Rs 5589.11 crore as GST in the first quarter while Rs 4978.75 crore was earned from excise. The revenue collected from VAT was Rs 2944.02 crore during the same period. The earnings from stamps and registration remained at Rs1412.89 crore while transport department collected tax of Rs 632.69 crore. Land revenue got Rs 111.00 crore while energy department was able to get Rs 48.02 crore only.

Among non-tax revenue earning departments, mining and minerals department got Rs 633.43 crore against target of Rs 900 crore while total non-tax revenue collected in first quarter was Rs 1696.27 crore against target of Rs 4524.55 crore.

“An upward trend in state government’s tax earnings is a good sign.

The state government’s revenue, including earnings from VAT, transport and stamps and registration gives indication of revival of economy. More revenue collection gives the government leeway to focus on development activities,” said Yashvir Tyagi, former professor, economics department, LU.

The state government spends a sum of Rs 12,000 crore to Rs 13,000 crore every month on salaries and pension of its employees. As the total earnings of the first quarter are only about Rs 15716.48 the state government faces a wide gap between earnings and tax collections.

It has already initiates measures to cut down its expenditure, besides freezing the dearness allowance and scrapping other allowances.

“The state government has to go a long way to increase earnings and strengthen its finances. If there are no more lockdowns due to Covid-19 pandemic, the situation will improve in coming months,” said Tyagi.

UP GOVT’S TOTAL TAX REVENUE COLLECTION IN THE FIRST QUARTER (APRIL 1 TO JUNE 30, 2020) WAS ₹15,716.48 AGAINST THE TARGETED TAX REVENUE OF ₹41,602.68 CRORE.