Chandigarh, May 16
Hit by demonetisation and GST rollout, the state’s small and medium-scale industry is witnessing an economic slowdown. This is evident from the state’s poor revenue growth, which has seen a fall of over 18 per cent from the targeted growth in 2017-18.
The state’s total revenue receipts have shown a shortfall of Rs 10,970.86 crore in the last fiscal against the targeted receipts. This has come to light through the audited financial results of March, 2018.
The state’s total revenue for 2017-18 was just Rs 49,109.01 crore, against a target of Rs 60,079.87 crore. Though generally the revised estimates of revenue receipts each year are less than the target, but the shortfall varies between 5 and 8 per cent. The 2017-18 is a rare case when the state witnessed a shortfall of 18.26 per cent.
What has hit the state’s fiscal health hard is the sharp shortfall in the state’s goods and services tax (SGST) collection. It is short of almost Rs 580 crore per month against the projected revenue. The shortfall in the GST collection and the overall fall in revenue have become a major cause of concern for the government.
FM to raise issue with Finance Commission
Finance Minister Manpreet Singh Badal, while talking to The Tribune, said the reason for the state falling short in its GST tax base was that 40 per cent of the state’s original tax base had been subsumed post GST rollout in July last year. The main taxes of Punjab that were subsumed were the taxes on foodgrains, which led to a loss of Rs 4,000 crore.
“We believe that Punjab will remain a net compensation state. Though we have got a 28 per cent increase in compensation (annual growth of 14 per cent is guaranteed over 2015-16 tax base) from the cess fund under GST, we will have to grow by 60 per cent to beat the revenue gap in GST. For the next three years, our revenue growth is protected (till 2021-22), but my worry is to bring the state’s own tax base to the level achieved with the compensation, when this compensation from the Centre stops in 2021-22. I will be raising the matter before the 15th Finance Commission,” he said.
Besides, the state’s tax revenue, too, has fallen short by Rs 7,642.35 crore. Against a target of Rs 50,176.92 crore, the total tax revenue collected by Punjab was Rs 42,534.57 crore. Manpreet said the majority of the tax base was the micro, small and medium industrial units. “They were the worst hit by demonetisation and have also taken time to scale up their businesses post GST. As a result, the state’s total tax collection has fallen. But plans are afoot for the additional resource mobilisation, which will help improve the state’s financial health this fiscal,” he added.