TS presses SOS button

Etela seeks Centre’s funds as revenue depletes due to note ban

With the Telangana state government starting to feel the real impact of demonetisation from December, finance minister Etela Rajender has scheduled a meeting in New Delhi with Union finance minister Arun Jaitley. He carries with him a report on the bad financial condition of the government and will seek compensation for the revenue loss.

The report states that the government managed to pay salaries for staff on December 1 due to the revenues that accrued in October but were remitted to the treasury in November.

Revenue collection fell by 70 per cent in November due to demonetisation and it would be tough to pay even salaries in January, leave alone meeting expenses for day-to-day administration.

Mr Rajinder was in New Delhi on Friday to attend the GST Council meeting, but has sought a separate appointment with Mr Jaitley on Saturday to discuss demonetisation and the state’s financial position.

A major part of the TS government’s revenue comes from commercial taxes, stamps and registration, excise and transport departments.

Normally, the state earns revenue of nearly `8,000 crore per month, including tax devolution from the Centre. Of this, 80 per cent is contributed by these four departments alone.

In the wake of demonetisation, revenue from these departments fell by 70 per cent as business transactions came to a halt due to the currency shortage, resulting in lower commercial tax collection. Liquor sales took a hit, property registrations slowed down and new vehicle registrations almost stopped with no one buying vehicles as banks stopped giving loans since they were preoccupied with currency deposits, exchanges and withdrawals.

“The real impact of demonetisation is being felt now. It will be difficult to meet salary and other expenses in January due to empty coffers in December,” he said.