Good tax collection is critical to Karnataka Chief Minister Sidaramaiah’s pet populist schemes.
Populist schemes are to the tune of around Rs 6,000 crore like ‘Anna Bhagya - a rice scheme of giving 30 kg at Re 1 per kg, social welfare pensions, loan waiver for backward classes and minorities.
Finding it difficult to fund his populist schemes as promised in the election manifesto, the Chief Minister cracked the whip and asked heads of revenue earning departments to buck up and deliver. The State’s own tax revenues target is Rs 62,464 crore and the Government has been able to mobilise 46 per cent at Rs 28,743.90 crore till September end. As for the other non tax revenue collection, the State has achieved 41.3 per cent at Rs 1,668.62 crore as against a target of Rs 4,038.28 crore.
The Government in its Mid Year Review of State Finance report admitted that it fears slippage in tax collections. It cites economic slowdown in the country and the State and there is no sign of recovery. This financial year (2013-14), the Government is expecting to maintain previous year’s tax collection level or may collect less mainly due to poor collection of motor vehicle taxes, mining royalty and slowdown in property registrations.
Commercial tax (taxes on sales, trade, etc) is the main sources of the State’s tax revenue with a contribution of 60 per cent followed by State excise around 20 per cent, stamps and registration fees 10 per cent and taxes on vehicles 6 per cent.
Commercial tax: The department as of October end has achieved little over 50 per cent collection at Rs 20,166 crore against the full year target of Rs 37,740 crore.
Motor vehicle taxes: Against the full year target of Rs 4,120 crore under motor vehicle taxes, the Government has been able to mobilise only Rs 1,793.55 crore, up to September (43.5 per cent).
Stamps and registration: The State has achieved 47.1 per cent collection at Rs 3,064.11 crore against the full year target of Rs 6,500 crore.
Excise: As the State is going into peak season (October – January) of liquor consumption, the department has achieved 49 per cent collection at Rs 6,168.37 crore against the full year target of Rs 12,600 crore.
anil.u@thehindu.co.in