The Telangana government has rounded off the financial year 2018-19 with the tax revenue of ₹72,739 crore, justifying its claim as the rich State.
Of this, the tax revenue – Goods and Services Tax, sales, excise, stamps and registration – accounted for ₹65,753 crore as against ₹56,520 crore in 2017-18, registering a revenue growth of 16.34% over the previous year.
The non-tax revenue from mines and minerals, sale of sand and others stood at ₹6,986 crore, less than ₹7,825 crore earned in the previous year. The average revenue growth stood at 13%, putting Telangana in the bracket of a few well-performing States in the country.
The State has been focusing more on improving its tax revenue in the light of a fall in Central funds and Sarva Sikhsha Abhiyan funds that are sanctioned to the State.
The Commercial Taxes Department has taken various measures to improve the GST compliance by trade and services sector through the use of IT apps. The department has also been gathering data on financial transactions through its Economic Intelligence Unit to use it when a tax-payer pays less than what should actually be paid.
Commercial Taxes Special Chief Secretary Somesh Kumar recently said at a meeting organised by the ASSOCHAM , Telangana unit, that the State has more data than the tax-payers.
FRBM limit
The State was also allowed relaxation of FRBM limit of 3% of GSDP to 3.25% giving it a leeway to borrow more from the market as it fulfilled the criteria stipulated by the 14th Finance Commission.
This year too, the State is confident of its Fiscal Responsibility and Budget Management rate relaxed to 3.25 from 3% of the GSDP which is ₹8.66 lakh crore.
Debt burden
But when the debt burden of the State is taken into consideration, it stood at ₹1.8 lakh crore at the end of 2018-19 financial year and accounts for 21% of the GSDP well within the FRBM norms.
Increasing debt burden means a chunk of State’s revenue goes for debt servicing and last year, the State paid ₹24,000 crore towards interest and principal and it is expected to touch ₹32,000 crore in 2019-20.
The State government is looking at debt consolidation and the process is on. It would allow the State to push back the redemption to later years so that it would get some relief in few years.
It would help the State to bring down its debt servicing amount and utilise it for the flagship projects that are facing fund crunch.
The State government is also not in a position to continue its borrowing spree as also the corporations that have borrowed almost to their limit, the sources said.