‘Notebandi’ aggravates post-‘nashabandi’ revenue scenario in Bihar
Patna,(BiharTimes): Even as Bihar was trying to wriggle out of revenue shortage caused by prohibition came the decision of demonetization. This came as a double blow to the state exchequer. According to state’s finance minister Abdul Bari Siddiqui demonetisation has led to a depressed market and this would result in decrease in revenue collection. He conceded that finances are difficult and the situation would probably extend to the next financial year.
Bihar, according to an estimate, is likely to suffer a loss of something between Rs 4,000 and 5,000 crore annually due to fall in excise revenue after total ban on liquor.
After prohibition the state government responded by raising VAT on consumer and food items, fuel, SUVs etc. Now after demonetization the state is likely to lose something between Rs 7,000 and 8,000 crore as sales tax. Bihar is not alone. Therefore, many state governments, especially led by non-BJP parties, are protesting. Bengal’s finance minister Amit Mitra has repeatedly raised the issue.
Officials fear that Bihar’s revenue is expected to dip further both from internal resources and central transfer.Though the state has not cut plan expenditure, pegged at over Rs 77,000 crore for 2016-17, the axe cannot be ruled out.
Keeping this situation in mind chief minister Nitish Kumar has reportedly asked ministers not to announce new projects. The formation of the Fitment Committee, which recommends a pay hike in accordance with the Central Pay Commission’s recommendations, has been delayed because once the new scales are implemented it would mean an additional burden of about Rs 7,000 crore on the state exchequer.
Reports now say that even some of the chief minister’s Seven Resolves, like power supply to all, may be hit because the spread of energy consumption would mean giving more subsidy. The state already owes power supply companies over Rs 3,000 crore.
The government has already conceded a drop of over 16 per cent in internal revenue collection in the second quarter (July to September) over the corresponding period last year. The targeted internal revenue for the current fiscal has been projected at Rs 29,730 crore. The state has not even been able to meet the target of Rs 25,656 crore set in the last financial year (2015-16).
Finance department officials now fear that Bihar might not even get the Rs 58,360 crore it expects to receive as share from central taxes during the current financial year.
But so far 'nashabandi' is concerned there is one consolation: it is good for society. But 'notebandi' has so far not yielded any desired result.
