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| Published in The Hitavada CityLine as lead on March 25, 2013 |
Maharashtra Govt fails to realise taxes of Rs 32,520 cr!
By Kartik Lokhande
Penny wise, pound foolish. Only these words can best describe Maharashtra Government’s fiscal management. Else, how can one explain levying of new taxes of Rs 1,150 crore in the budget while there is non-realisation of taxes to the tune of Rs 32.520 crore?
Presenting the latest budget, Finance Minister Ajit Pawar announced levying of new taxes to raise Rs 1,150 crore and mitigate drought situation in some districts of the State. He claimed that Maharashtra’s fiscal management was good and that all vital indicators like debt stock as percentage to Gross State Domestic Product (GSDP), fiscal deficit to GSDP, revenue deficit to GSDP etc were well below the prescribed limits. However, Finance Department’s own disclosures on medium-term fiscal policy and fiscal policy strategy statement reveals that Maharashtra Government raised taxes of Rs 32,520 crore but did not realise the same for a period between 1 year and over 10 years.
In short, it levied taxes but did not obtain the same. The non-realised amount of taxes has reached such a level that it is 69.28 per cent of this year’s plan size of Rs 46,938 crore announced in the budget! The whopping amount of taxes not realised could have been enough for payment of interest on loan taken so far, and still some amount would have been left. A little digging answers the simple query – Why so much of taxes were not realised? The Government’s own records reveal that a substantial part – Rs 22,816.77 crore – has not been realised so far due to disputes.
The non-realised taxes are divided into two categories – under disputes and not under disputes. The part under disputes is substantially higher than that classified as ‘not under disputes’ as tax-payers disputed the amount of tax calculated by the Government agencies. In some cases, the dispute is pending for over 10 years. While the non-realised taxes in the category of ‘under disputes’ amount to Rs 22,816.77 crore, those in ‘not under disputes’ are pegged at Rs 9,703.91 crore. It is surprising how could the Government not realise undisputed taxes. More surprising is the fact that an amount of Rs 1,728.58 crore of undisputed tax revenue has not been recovered for over 10 years! One fails to understand what is the Government waiting for to realise such a huge amount of tax revenue.
Of the total amount of taxes not realised, sales tax/value added tax including taxes on motor spirits and lubricants constitute the single biggest component. Of a total non-realised taxes of Rs 32,520.68 crore, a whopping amount of Rs 22,967.23 crore has been classified under this single component. The other major components include: central sales tax—Rs 7,324.32 crore; taxes on professions, trades and employment—Rs 581.28 crore; land revenue—Rs 436.05 crore; electricity duties—Rs 406.10 crore; minor minerals etc—Rs 351.04 crore; taxes on vehicles—Rs 146.81 crore; taxes on goods and passengers—Rs 123.74 crore; entry tax—Rs 103.08 crore.
Tax revenues not realised
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Period Amount under disputes Amount not under disputes
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1-2 years Rs 5,811.12 cr Rs 1,841.16 cr
2-5 years Rs 8,755.24 cr Rs 3,263.00 cr
5-10 years Rs 6,510.37 cr Rs 2,871.17 cr
10 yrs and
above Rs 1,740.04 cr Rs 1,728.58 cr
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Total Rs 22,816.77 cr Rs 9,703.91 cr
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