Calculations go awry, loss estimated at Rs 10,000 crore.
Hyderabad: The TS government’s calculations regarding the impact of demonetisation on the state’s revenues have gone awry.
The TS government had expected that demonetisation would cause a loss of about Rs 3,000 crore to the state, but the latest indications suggest that losses will be close to Rs 10,000 crore.
Chief Minister K. Chandrasekhar Rao rushed finance minister Etala Rajender to New Delhi on Thursday, with a representation to the Centre, asking them to come to the state’s rescue by releasing CST and Central-sponsored scheme arrears amounting to over Rs 16,000 crore, at the earliest.
The current financial year is set to end in another three weeks, and the impact of demonetisation on the state revenues is more than what was anticipated.
Mr Rao, while strongly supporting the demonetisation drive, had claimed that its impact on the state’s revenues would be minimal.
However, the growth achieved in the first half of the fiscal year (April 2016 to September 2016) by all the major revenue-earning departments was negated in second half (October 2016 to March 2017), because of the demonetisation announced in November.
Left with a huge financial deficit, the state government has set a target of Rs 5,000 crore to be collected in the form of taxes by revenue-earning departments by taking up special drives in the remaining three weeks. The four main revenue-earning departments for the state government are Commercial Taxes, Stamps and Registrations, Excise, and Transport.
Mr Rajender is scheduled to present the Budget for 2017-18 in the Assembly on Monday. Sources say that the CM suddenly deputed him to Delhi to secure a clear assurance from the Centre regarding the payment of arrears, as Budget plans will otherwise have to be altered, to account for demonetisation losses.
Official sources in the Finance Department said, “Because of the cash crunch, the payment of commercial taxes, and the registration of properties and vehicles have been badly hit. At the most, we can reach Rs 45,000 crore in the remaining three weeks of this fiscal year, which would leave a gap of over Rs 9,000 crore.”
The government wants to fill this deficit with arrears to be paid by the Centre. However, it remains to be seen whether the Centre releases the arrears immediately, or keeps them on hold, as it has done for the past two years.
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