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Focus on State’s own tax revenue
Focus on State’s own tax revenue.The Telangana government is banking on State’s Own Tax Revenue (SOTR) to mop up its revenues and thus implement various welfare and flagship schemes smoothly without financial worries.
Hyderabad: The Telangana government is banking on State’s Own Tax Revenue (SOTR) to mop up its revenues and thus implement various welfare and flagship schemes smoothly without financial worries. This is anticipated in view of Centre shelving many schemes under which states were entitled to receive a major chunk of funds.
- Central grants decline by `9,320 crore
- `46, 494 crore expected under SOTR
SOTR has become very crucial in view of Centre Grants reduced by a massive Rs 9,320 crore. While the Centre Grants for 2014-15 was Rs 21,720 crore, the estimate for the coming financial year was put at Rs 12,400 crore.Finance Minister Eatala Rajender has set a target of Rs 46,494 crore through SOTR in next fiscal, which is nearly Rs 11,000 crore high compared to the previous financial year. Of this budget estimates on Sales Tax has been enhanced to Rs 35,463 crore, which is a considerable rise from Rs 26,963 crore of the previous financial year.
When asked whether government was mulling to hike taxes, Eatala replied in the negative. He stated that the tax collection mechanisms would be strengthened to ensure set target was attained. Further, he said that previous figure was for ten months while the Sales Tax estimate for 2015-16 was a little higher since it is for the entire year (12 months).When asked whether it was possible to achieve estimated Sales Tax target without increasing Sales Tax, a tax expert felt that this was an aspiration budget.
Normally budget is prepared keeping in mind growth rate of the state in the last ten years. Since Telangana was a newly created state, these estimates were prepared with the hope of achieving it.He however said that revamping organisational structure such as strengthening of check posts, deploying more field level staff, ensuring inter-department co-ordination, settling long pending disputes and recovering arrears could contribute to considerable rise of Sales Tax revenues.
According to experts, the increase in states’ share of Union tax revenue from 32 to 42 per cent would benefit the state immensely. Telangana is expected to generate huge revenues of Income Tax, Excise Duty, Corporate Tax, Service Tax every year. Of this 42 per cent share will be given back to Telangana. TRS government could utilise this fund for implementation of welfare schemes.Even in the budget estimates, the share in Central Taxes was projected at Rs 12,823 crore which was Rs 3,000 crore (nearly) higher than the last fiscal. This hike is due to Centre’s decision to increase 10 per cent devolution to States.
