Slowdown blues: UP to plug gaps, intensify enforcement as tax purse shrinks

Yogi government to auction stone quarries, curb illegal mining to expand kitty

With the economic slowdown hitting Goods and Services Tax (GST) collections across the board, the Uttar Pradesh government is gearing up to plug ‘leakages’ in the state tax mop-up.

UP finance minister Suresh Kumar Khanna has expressed concern over muted tax and non-tax revenues, even as the Yogi Adityanath government has started preparing for the 2022 state elections, which would require liberal budgetary allocations towards social, industrial and infrastructure sectors.

The government has begun exploring new sources of revenue as well. For example, the state has decided to levy cess on sand imports from Madhya Pradesh, while the proposal to start auctioning stone quarries is under active consideration, apart from curbing illegal mining, to expand the kitty. 

The state is targeting a tax mop-up of Rs 1.4 trillion in the current fiscal, 4.4 per cent more than revised the budgetary estimates of Rs 1.34 trillion last financial year.

Chairing a review meeting in Lucknow, Khanna recently pulled up mandarins of tax revenue wings, including commercial tax, excise, transport, mining and stamps & registration departments and stressed upon cent-per-cent collection, so that planned public expenditures were not impacted.

For augmenting the GST kitty, the minister directed commercial tax officials to intensity monitoring and enforcement for achieving the targets. He also instructed the department to make a detailed presentation about the state GST mop-up in the first week of October.

Meanwhile, he lamented lower excise revenue and stressed upon greater enforcement and vigilance in the department for robust collection.

During 2019-20, UP has projected revenue receipts of nearly Rs 3.91 trillion, including tax and non-tax revenue, both emanating from state and its share from tax and non-tax revenue of the Centre, apart from the central grants of Rs 68,000 crore.

Of net tax revenue of about Rs 2.93 trillion, Rs 1.4 trillion would accrue from own resources, while Rs 1.53 trillion would come as the state’s share in the central taxes.

According to the UP Budget 2019-20, tabled in the state legislature on February 7, 2019, the state has estimated kitty of Rs 77,640 crore from State GST (SGST) and VAT, while excise purse has been pegged at Rs 31,517 crore.

During Apr-July 2019, UP tax revenue, comprising GST, Value Added Tax (VAT), excise, stamp and registration, transport, energy and land revenue heads, stood at Rs 41,202 crore. Similarly, the state clocked non-tax revenue of Rs 1,982 crore during the first 4 months of current fiscal under the heads of mining, minerals, irrigation, forest and wildlife, police, public works department (PWD), housing, and employment.

Meanwhile, the state's stamps & registration purse shrank due to a slew of waivers under different schemes, that were announced by this and previous governments for promoting investment. However, the government will consider all such waivers afresh to ensure there are no leakages henceforth.