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Sunday, 4 October 2020

Covid hits Haryana’s fiscal health

Bhartesh Singh Thakur

Tribune News Service

Chandigarh, October 3

Under the Covid shadow and economic slowdown, the borrowings and other liabilities of the Haryana Government crossed Rs 12,000 crore at the end of August this financial year. The revenue receipts have shrunk by 28 per cent when compared to the corresponding period last year.

The borrowings and other liabilities (net) this year till August reached Rs 12,075.06 crore while these were at Rs 9,966.80 crore last year. So, there is a jump of 21.2 per cent when compared with the corresponding period last year.

The total receipts of the government, both revenue and capital, amounted to Rs 32,247.42 crore. The borrowings are part of capital receipts.

On the expenditure side, Rs 30,515.73 crore, which is 95.2 per cent of the total, alone has gone towards revenue expenditure which included salaries, pension, subsidy and interest payments.

Revenue receipts

According to CAG's month-wise provisional figures, the revenue receipts of the state government were Rs 20,078.10 crore at the end of August while they were Rs 28,078.83 crore during the corresponding period last year. There is a dip of 28.5 per cent.

The Goods and Services Tax (GST) was down by over 31 per cent as only Rs 5,341.68 crore was earned while it was Rs 7,750.62 crore in the corresponding period of 2019.

There was a major fall in earnings from stamps and registration as only Rs 1,099.47 crore was earned. It was Rs 2,731.17 crore in the corresponding period of 2019. There was a dip of 59.7 per cent. This year, land registration was halted too for some time after allegations of corruption had surfaced on the part of revenue officials.

The sales tax collection, which includes earnings from the sale of petrol and diesel, had come down to Rs 2,830.67 crore this financial year while last year, the earnings were Rs 3,618.28 crore. There was a shortfall of 21.8 per cent.

The state's excise duty fell by 16.3 per cent as only Rs 2,572.42 crore was collected this year till August.

The non-tax revenue, which includes collections from mining, transport, External Development Charges (EDC), was down by 59.8 per cent as only Rs 975.50 crore came. As much as Rs 2,426.69 crore was earned in the corresponding period last year.

The recovery of loans and advances was dismal at just Rs 87.03 crore while it was Rs 5,224.30 crore last year.

"The tax revenue during lockdown in April and May was just Rs 1,305.40 crore and Rs 3,608.38 crore respectively. But for June, it jumped to Rs 7,007.21 crore and for July, it further rose to Rs 10,376.51 crore. It was Rs 14,624.26 crore in August. So, the recovery is on the way," said a senior official in the Finance Department.

GST compensation

As per provisions in the Goods and Service Tax (Compensation) Act, 2017, the states are assured of their revenue at 14 per cent compounded growth rate over the base year revenue 2015-16 for loss of revenue arising on account of GST implementation for a period of five years.

Due to the inadequate balance in the Compensation Fund, the admissible bimonthly GST compensation has so far not been released. According to figures submitted before Parliament last month, Haryana had received Rs 1,461 crore as GST compensation from the Centre in 2017-18 and Rs 3,916 crore in 2018-19. For 2019-20, the state was given Rs 6,617 crore. However, for April to July of 2020-21, the release of Rs 5,841 crore is due. During the 41st GST Council meeting in August, the states were

given options to meet their compensation shortfall from market borrowing.

from The Tribune

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