Sluggish revenue generation has forced the State Government to go in for more and more borrowings from the market to fund several developmental and infrastructure projects.
During 2015-16, the State Government had borrowed Rs 4,400 crore from market, which went up to Rs 7,600 crore in 2016-17 fiscal.
With a slowdown of the Central funds flow, the State Government started going for market borrowings from 2015-16 after a period of nine years. last time, the State had gone in for market borrowing in 2005-06.
According to sources, the State Government would have to go in for more market borrowings to support different welfare schemes as tax and nontax resources generation did not show any marked improvement during the financial year.
While the State Government has committed to provide more funds in the 2017-18 Budget for agriculture, social and infrastructure sectors, with Central assistance almost drying up, the State Government faces a daunting task to meet its announcements and undertake projects in the development sector.
So far as revenue collection is concerned, there was less collection of tax and nontax revenue during 2016-17. While collection of the total revenue was Rs 31,238 crore during 2015-16, it came down to Rs 30,227 crore in 2016-17.
On nontax revenue, the State suffered a loss of 14 per cent as it collected Rs 7,425 crore in 2016-17, which was Rs 8,711 crore during 2015-16. A negative growth of nontax revenue was due to reduction in receipt in from the mining sector, which fetched less than 16 per cent in comparison to 2015-16. In 2015-16, the collection of mining royalty was Rs 5,798 crore, which went down to Rs 4,834 crore in 2016-17.
For last several years, mining royalty has been going down, and the State is facing crunch of funds to take up developmental projects due to the sluggish market condition in the metal sector.
The State’s own tax revenue is also affected, and the growth has slowed down. The own tax revenue collection registered a marginal growth of over one per cent in 2015-16.
The State collected less revenue from registration fees, stamp duty and land revenue. The lower collection of stamp duty is related to less renewal of mining leases, said officials.
Zero collection from the Indian Oil Corporation limited (IOCl) has also impacted the growth of sales tax. The sales tax collection was Rs 13,096 crore during 2015-16, which marginally went up to Rs 13,339 crore in 2016-17.
Spending has been going up on the development and infrastructure sectors as the State is committed to spend more on these sectors. While the State Government has been repeatedly urging the Centre to improve the flow of its funds looking at the backwardness of the State, fund flow from the Central kitty is just not improving, said official sources here.