Bengal’s tax growth juggernaut stumbles

WITH TWO MONTHS LEFT IN THIS FISCAL YEAR, FIN MIN AMIT MITRA STARES AT RS 10,000 CRORE GAP IN PROJECTED TAX REVENUE

By bappaditya paul 

The juggernaut of growth in tax revenue that the West Bengal finance minister Amit Mitra has been riding high on since 2011-12, has started slowing down this fiscal year if not coming to a halt altogether. Victoria MemorialAccording to highly placed sources in the state finance department, till the end of January, Bengal has been able to mop up a tax revenue of around Rs 35,000 crore as against the Rs 45,000 crore target that Mr Mitra had set for the 2014-15 fiscal year.

With barely two months remaining of the current fiscal year, officials are mincing no words in admitting that it will not be possible to meet the Rs 10,000 crore gap in the targeted revenue.

“The effort now is how close we can get to the Rs 45,000 crore target,” said a senior finance department official on conditions of anonymity. In the previous fiscal year, that is, in 2013-14, Bengal had witnessed a tax revenue collection of Rs 40,000 crore and it would be a loss of face for Mr Mitra if the state failed to cross that figure this time, even if marginally. Amit MitraFinance department officials are blaming a no or negative growth in entry tax collection as the main reason for lagging behind in revenue target.

“As against the previous year, we have witnessed a 21 per cent rise in excise revenue, around 15 per cent rise in VAT and there has been a robust growth in stamp duty collection. But entry tax is a major factor wherein we have so far been unable to go anywhere near the target,” said a senior official. “Our target from entry tax in 2014-15 was around Rs 1,400 crore. This is about five per cent of the total revenue projection.”

Ongoing litigation by transporters and other private parties challenging the imposition of entry tax by the state government was the reason behind the dismal entry tax collection, the official explained. The collection from entry tax in 2013-14 was Rs 993 crore, which was a remarkable fall from the Rs 1,283 crore that was collected in 2012-13 under this head. Amit Mitra 1The slowing down of revenue growth in this fiscal year will deflate Mr Mitra’s pride as he has been highlighting this as a major achievement of the Trinamul Congress government at every given opportunity.

In the 2010-11 fiscal year, that is the last year of the Left Front government, Bengal’s tax revenue was Rs 21,000 crore. From this, Mr Mitra took it to Rs 25,00 crore in 2011-12, Rs 32,000 crore in 2012-13 and Rs 40,000 crore in 2013-14.

Mr Mitra who held a pre-budget discussion with various chamber of commerce at the Town Hall on Saturday morning, refused to comment when a reporter asked him the hurdles that he faced in realising the budget targets in the current fiscal year. “The Budget will be tabled in the Assembly on 27 February; all your queries will the get answered there,” he said.

(The author is on the staff of The Statesman, India. This report first appeared in The Statesman on 08 February 2015.)

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