Haryana’s revenue receipts down 30% than last year: CAG report

Gurgaon: From excise duty to non-tax receipts and GST to stamp and registration duty, the overall revenue collections of the state have slumped by more than 30% this July in comparison to the corresponding period last year.
According to data released by the comptroller and auditor general (CAG), only 16% of the budget estimates for 2020-21 — Rs 89,964 crore — has been realised until July 2020. This is critically short of the Rs 22,221 crore collected during the same period last year against an estimate of Rs 82,219 crore.
The CAG report goes on further to give an idea of the financial stress that the state is reeling from. From GST to stamp duty, almost all indicators have seen a massive slump despite economic activities resuming after the lockdown.
The GST regime has, in fact, become a major pain point not only for the ailing industry stakeholders but also for the state government. Collections this year have seen a 31% decline, down to Rs 3,698.7 crore. Non-revenue tax collections, which include revenue from mining, transportation and urban development, have been among the hardest hit. This category has seen a 63% decline, down to Rs 696.9 crore from Rs 1,885.7 crore last year.
Similarly, stamp duty and registration fee collections have reported a 58% drop. The government has been able to collect Rs 938.8 crore between April and July this year. Moreover, despite the rising prices of diesel and petrol, sales tax collection this year stood at Rs 2,056 crore against Rs 2,920 crore last year.
The poor recovery of loans and advances also dealt a massive blow to the state’s finances. Compared to July 2019-20, when Rs 5,211.4 crore was recovered against Rs 5,449.4 crore, only Rs 59.2 crore could be recovered this time against an estimated Rs 356.2 crore.
Sources said much of the loan amount extended towards the Uday scheme had been converted into government liabilities. Moreover, the estimated recovery of loans and advances is primarily the payment that is to be received by the Food Corporation of India (FCI), they said.
“Till July, all trains were suspended. So, the crops we procured were not lifted by the FCI. Now, they are beginning to lift it. This would translate into increased recovery,” a senior government official said.
While earnings have taken a massive hit, a marginal rise in the revenue expenditure, contraction in capital expenditure and increase in borrowings is further pushing the state towards an expected downtrend in industrial growth. To meet the capital shortage, the government is borrowing more. Its borrowings and other liabilities stood at Rs 10,612.9 crore this July in comparison to Rs 7,383.8 crore last year.
This, in turn, has caused an exponential rise in the revenue deficit, which has shot up from Rs 1,344 crore in July 2019-20 to a whopping Rs 8,437.7 crore this time.
Economists have highlighted that tepid consumer demand and misplaced policy intervention have led to depleting revenues and increased borrowing. “The downfall has come mainly from GST, stamps and registration duty, sale taxes and recovery of loans and advances. The government’s borrowing has also increased from 32% last year to around 42% of the estimated budget this time. So, the difference between receipts and expenditure would widen up. Going ahead, the government may have to borrow more,” said Hisar-based economist Naveen Johar.
Sources said July had been better in comparison to the previous months, but they warned of widespread uncertainty in the coming months. “See, compared to the past three months, July has been relatively better. But, we can’t say whether the trend will continue or we’ll see a dip. We are living in the most uncertain times. Even the Centre is forecasting a massive contraction in GDP. We may see improvement in few indicators, but the overall market sentiments are very uncertain,” said a source.