Efficiency in tax collection has boosted Karnataka’s revenue. Despite the drought situation prevailing in many districts and the economic slowdown, the State’s tax revenue has grown by 17 per cent in the first nine months (April-December) of the current financial year.
During the April-December period, commercial tax collection grew by 17 per cent to Rs 23,242 crore over the same period last year. Excise collection went up 22 per cent to Rs 8,299 crore, motor vehicles tax collection grew 21 per cent to Rs 2,621 crore. Only in stamps and registration, the State registered single-digit growth of eight per cent at Rs 3,899 crore.
“Karnataka is fairly safe and strong on all parameters as for as fiscal position is concerned. The State registered 17 per cent growth in tax revenue. GSDP is around 14 per cent,” said L.V. Nagarjan, Karnataka Additional Chief Secretary –Finance.
“All norms laid out by the Finance Commission have been met in terms of deficit being kept within limits - total liabilities as a percentage of GSDP, and interest payment as a percentage of revenue receipts,” he added.
Resource position
The total revenue receipts of the State during the first-half of this fiscal stood at Rs 36,527 crore, including the State’s own tax revenue of Rs 25,590 crore and non-tax revenue of Rs 1,645 crore.
In the mid-year review of State finances, the government had said total receipts during the first half of fiscal 2012-13 is 50 per cent of budgeted tax and non-tax receipts for the year which is above the moving average of 46 per cent during the first half of the previous five years. Overall receipts for the State during the first half of this year is around 21 per cent above the corresponding period in 2011-12.
The State is able to achieve the set revenue receipts of Rs 81,000 crore, of which Rs 52,000 crore will be State tax revenues. The share of Central taxes is about 13,000 crore and grants are estimated to be around Rs 13,400 crore and other non-tax revenue receipts are Rs 3,200 crore.
Like others States, Karnataka is also affected by high inflation, RBI’s tight monetary policy and sharp economic slowdown.
“The State is facing a crisis due to drought as nearly half of the districts did not get adequate rains. It is yet to come out of the impact of mining ban also,” said B.T. Manohar, Chairman – State taxes, sales tax and local excise duty committee, FKCCI.
“As far as State taxes revenues are concerned, they are robust,” he added.