Demonetisation of high value currency in August last has cast a debilitating impact on the State’s revenue collection.
As per official statistics, Lotteries, Registration and Excise Departments that were the main revenue spinning sources of the government have recorded negative growth during the previous months.
Except for the non-Value Added Tax commodities, petrol and liquor, returns from all others avenues have taken a serious dip. The increase in returns from such commodities is being attributed to the periodical hike in petrol and diesel prices by the Centre.
The revised budget presented by Finance Minister T.M. Thomas Isaac had proposed to increase the tax collection ideally to 20% and it had touched 17% in October from a meagre 5% in June.
But the post demonetisation rates show that it fell to 14% in November and slided to 9% in December and an all-time low of 4% in January 2017. The situation was not so rosy even now and picking up the growth would not be an easy task in the current circumstances, sources said.
The revenue collection in the Excise Department in January has recorded a decline in growth by 1.03% and lotteries by 0.49 %. The Registration Department recorded abysmally low growth rates during previous months – 17.51% in November, – 10.6 in December and – 12.79% in January. The only exception is the Motor Vehicles Department that has registered 18.75% growth in January from the 7.43% in December last. But this rate is not even a pale comparison of the collection earned by the department in the corresponding period last year, sources said.
The fall in revenue collections is being seen as a straight reflection of the crisis gripping the economy at present. The alarmingly fall in revenue collection shows the slump in production, sales and demand. This points to the impact of the sudden retraction of liquidity and purchasing power of the people.
The fall in revenue collections had deprived the government of the leeway to be more generous in the budget that was scheduled to be presented on March 3 and would have to tap other avenues to tide over the crisis, sources said.
