Karnataka is unlikely to meet the projected target of 15 per cent growth in tax collections during the present financial year. Karnataka chief minister B S Yeddyurappa, who also holds the finance portfolio, had projected a growth of 15 per cent or an additional Rs 2,500 crore in tax collections, to touch Rs 20,125 crore mark for the present fiscal-ending March 31, 2010.
However, going by the present indications, the state could end the fiscal with a tax mop up of around Rs 17,000 crore to Rs 17,500 crore. During 2008-09, the state registered a growth of 7.7 per cent in tax collections at Rs 17,500 crore.
According to data with the state department of commercial taxes, the total tax collections during the first 10 months of the present fiscal-ended January 2010 reveal stagnation in tax collections at Rs 14,409.83 crore as against Rs 14,453.52 crore for the same period a year ago.
The reason for stagnation in state’s tax collections was largely attributed to general slowdown in the Indian economy during the first half of the current fiscal and slump in some specific sectors like real estate, IT, ITeS and agriculture among others.
The real estate, which contributes to more than Rs 1,000 crore to the state exchequer, has a cascading effect as it influences commodities like steel and cement.
Karnataka’s tax collections mainly come from value added tax, sales tax and central sales tax. These taxes collectively contribute around 85 per cent of the state’s total tax collections. The remaining portion comes from other heads like entertainment tax, agricultural income tax, entry tax, luxury tax, special entry tax, betting tax, lottery tax among others.
During the first five months of the present fiscal, the state’s tax collections were lower by 8.5 per cent to Rs 6,858.77 crore compared to the corresponding period of the previous fiscal. However, tax collections registered a rise for the first time during September, though marginal, giving hopes of a revival.
During the month of January, 2010, tax collections rose 21.8 per cent to Rs 1,687 crore compared to the same month last year. The last two months of the year are likely to add close to Rs 3,000 crore to the state’s tax kitty to take the total collections at more or less the level of last fiscal, the sources added.
|TARGET TOO FAR
# CM and Finance Minister B S Yeddyurappa had projected a growth of 15 per cent.
# It meant an additional tax mop up of Rs 2,500 crore.
# The total tax collections during the first 10 months of the fiscal-ended January 2010 reveal stagnation in tax collections.