Haryana Chief Minister Manohar Lal, presenting his maiden budget as Finance Minister on February 28, refrained from imposing any fresh tax, but what went largely unnoticed is a proposed hike for social, economic and general services under the non-tax revenue head putting a burden of ₹5,200 crore on the State residents compared to the previous budget.
The proposed ₹29,383.67 crore non-tax revenue budget estimates for 2020-21 constitute 32.66% of the total revenue receipts, while the ₹19.897.77 crore non-tax revenue comprised only 24.20% of the total estimated revenue receipts for 2019-20. The percentage share of non-tax revenue in the estimated revenue receipts was 26.13 % in 2016-17, 24.84% in 2017-18, 24.04% in 2018-19.
The charges paid by the users for various social, economic and general services provided by the government constitute the non-tax revenue.
As per the budget estimates for 2019-20, the non-tax revenue from the social services was pegged at ₹4,656.55 crore, but it has been proposed to be increased by around 90 % to ₹8,931.03 crore for the current budget. Similarly, for the economic services, Mr. Lal has proposed an increase of 26.84% from ₹3,196.67 crore to ₹4,054.87 crore. The proposal for the general services under the non-tax revenue head has been increased from ₹523.51 crore to ₹599.78 crore with the hike of around 14.56 %.
Associate professor, Dhronacharya Government College, Gurugram, Anjana Nagpal, said the tax rates were already high and therefore the government had little choice but to seek to increase the revenue by way of hike in the user charges for various services under the non-tax revenue bracket.
‘Increase tax net’
She suggested that the government should increase the tax net to bring more people within its ambit and eradicate black money. “It will increase the revenues for the government without burdening the law-abiding citizens,” suggested Ms. Nagpal.
The hike in non-tax revenue could also be necessitated due to sluggish economy as suggested by revised estimates for 2019-20 budget. Also, revenue estimates for the current budget from the State Goods and Services Tax and the Sales Tax are pegged lower compared to the estimates last year, indicating that the government in not very hopeful of high tax collection. Besides, the increase in tax rates would not have been a politically correct decision.
Professor Surinder Kumar, Visiting Professor, Centre for Research in Rural and Industrial Development, Chandigarh said the user charges from the rich was fine but from the poor was questionable for a welfare state, adding that differential user charges were appreciated.