Maharashtra government is mulling to tap new sectors for levying taxes, in order to recover its revenue losses running into hundreds of crores.
According to a state minister, the government will face a shortfall of at least Rs 7,000 crore in 2016-17 financial year if the Parliament does not pass the Goods and Service Tax (GST) Bill in the ongoing session.
The state government had abolished the Local Body Tax (LBT) in October 2015, causing the state exchequer a loss of Rs. 7,000 crore, anticipating that the loss would be recovered after GST is implemented.
“We are almost sure that the GST Bill will not be passed in the ongoing session because of political hurdles. In that case, we are bound to search for new avenues to generate revenue,” the minister said.
The less revenue generation is likely to compel Finance Minister Sudhir Mungantiwar to restrict the state Budget size for the next fiscal at around Rs 55,000 crore, identical to last year.
A source said that the BJP-Shiv Sena government has managed to achieve its target of revenue collection in terms of Value Added Tax (VAT), Sales Tax and Excise Tax, considered to be the major revenue contributors.
However, the Urban Development Department (UDD), led by Chief Minister Devendra Fadnavis, has miserably failed in achieving its target.
“The UDD was expected to collect revenue of Rs. 5,000 crore. They have managed to collect only Rs. 470 crore so far. They had anticipated that their schemes will generate huge revenue, but it seems to be a nightmare at this juncture,” the minister said.
Mungantiwar, meanwhile, admitted that all is not well on the state’s financial front.
“We are facing a cash crunch, but I have ensured that there is no cut in finance in several areas. We have been able to pay salaries on time. The farmers are given compensation. We have also spent money for development work. There is no cut in finance to irrigation projects as announced in the last budget,” he said.
The budget session of Maharashtra Legislature will start in Mumbai from March 9 and the state budget will be tabled on March 18.