Rajasthan’s revenue fell by 70% in April
The state was expected to earn ₹6,800 crore through tax and GST compensation and ₹1,600 primarily through royalties from mining and petroleum activities.
Rajasthan’s revenue collection in the first month of the financial year 2020-21 has fallen by 70% as on Wednesday even as it fights the Covid-19 pandemic, said officials.
“We had set a target of ₹8,400 crore in April and have been able to achieve only ₹1800 crore. In March also, there was a shortfall of ₹3,500 crore. This has put us in a fiscal crisis... chief minister [Ashok Gehlot], who is also the finance minister, has requested the Centre for a package,” said Niranjan Arya, additional chief secretary, (finance, taxation and excise).
The state was expected to earn ₹6,800 crore through tax and GST compensation and ₹1,600 primarily through royalties from mining and petroleum activities.
The state has allocated around ₹1,200 crore for the Covid-19 related expenses, including for providing free wheat among the beneficiaries of the National Food Security Act.
The Centre has given ₹500 crore as GST compensation for January. ₹2,482 for February and March are pending, said another requesting anonymity. The Centre compensates states for GST shortfall every two months.
The state has faced the biggest drop in tax revenue earned through stamps, registrations of properties and vehicles because there has been virtually no sale of property and vehicles, the second official added.
The target for stamps and registrations for April 2020 was ₹466 crore. The state got only ₹6 crore. Similarly, for vehicular tax, the target was ₹500 crore. But the state has managed to collect only ₹8 crore.
The state deferred a part of salaries of legislators and its employees, including the officers of the all-India services in March. Five days of salary was deducted as a donation to the Chief Minister’s Relief Fund for Covid-19. As the date for disbursement of April salaries nears, the finance department is staring at a crisis.
Gehlot has sought ₹100,000 crore for the states from the Centre, which can be distributed among them as per their share in central taxes. He has also requested an increase in the limit for borrowing from the open market, which is currently 3% of the state GDP for Rajasthan. Gehlot wants this to be raised to 5%.
Arya said the state’s GDP is around ₹11,00,000 crore. The 2% raise will enable the state to borrow around ₹20,000 more.
