Land and vehicle sales which dropped significantly since the withdrawal of Rs 500 and Rs 1,000 notes, announced by Prime Minister Narendra Modi on November 8, have deeply dented the revenue receipts of the State government.
So much so, Chief Minister K. Chandrasekhar Rao has mainly focussed on how to shore up resources if the trend continued for some more time. Sources said, on Mr. Rao’s instructions, the revenue earning departments had furnished to him daily situation of the impact on their earnings.
While the registration of lands had almost come to a standstill and deprived the government of the lion’s share of revenue which accrued from this sector, another major money spinner – motor vehicles tax – also dipped significantly. The gold sales also went down in a big way but the loss to the government was not much as the value added tax on the metal was only one per cent of the value.
According to Transport Commissioner Sandeep Kumar Sultania, the combined sales of high and low end vehicles were down 45 to 50 per cent. It was feared that the sales may go down further if the problem persisted. Whatever sales took place now were planned earlier. He estimated the loss to government at Rs 2.5 crore a day.
The president of Automobile Dealers Association Ram Yalamanchili said the future was uncertain for the dealers.
Even payment of salaries to the staff was a challenge this month. Leave alone sales, he said even income from service of two wheelers had stopped because the customers paid in cash.
Excise Commissioner R.V. Chandravadan said the sale of liquor was normal now but it was expected that the drop might be in the range of 20 to 25 per cent in the coming days if the situation did not improve. A senior official said the ideal situation to look at revenue loss will be only a month later when the real trend emerged. This was not the right time because the sales, particularly vehicles, peaked before Diwali and declined later. Even if the revival of cash flow took place, not all money will come back into the system.
