Punjab registers 22% jump in tax revenue
Punjab registered a 22% year-on-year jump in tax revenue in first 10 months of the financial year 2023-24 due to robust demand and stricter compliance
Chandigarh : Punjab registered a 22% year-on-year jump in tax revenue in first 10 months of the financial year 2023-24 due to robust demand and stricter compliance.
The tax revenue stood at ₹53,617 crore in the April-January period, up from ₹44,175 crore in the corresponding period of the previous year, according to data on fiscal indicators released earlier this week.
The growth is primarily due to improved goods and services tax, sales tax, and excise collections as well as the state’s share of central taxes, which together account for approximately 84% of the tax revenue of Punjab.
GST boosts tax revenue
The goods and services tax (GST) collection has seen an increase of 16% in the April-January period, going up to ₹17,295 crore from ₹14,989.5 crore a year earlier. “The growth is driven by increased business activities and enhanced monitoring to plug revenue leakages. It is the second year in the running that we have registered this kind of growth in goods and services tax,” a taxation department official said, pointing out that GST collection is widely considered an indicator of economic activities.
Double-digit growth in sales tax, excise
The increase in sales tax and state excise collection has also helped the state government improve its tax revenues this year. At ₹7,446 crore, the state excise is ₹740 crore, or 11%, more than ₹6,706 crore collected in the corresponding 10-month period of 2022-23. The state has clocked a 14% y-o-y increase in sales tax, thanks largely to hike in the value-added tax on petrol and diesel. The big boost for tax revenue has come from Punjab’s share of central taxes, which has seen an impressive increase of 23%.
The state has received ₹2,755 crore more this time than last year because of robust tax collection. The tax revenue in the first April-Jan period is 76.28% of the budget estimates for 2023-24, indicating that it may fall short of the annual target of ₹70,293 crore. The non-tax revenue has shown an increase of 12% year-on-year during this period, but it is way below the FY24 target.
Revenue deficit exceeds budget estimate
Despite the strong growth in tax revenues, rising revenue deficit has emerged as a challenge for the state government. The revenue deficit has shot up to ₹25,578 crore in 10 months and surpassed the budget estimate of ₹24,580 crore for the current fiscal by 4%.
Revenue deficit means the government’s revenue expenditure is in excess of revenue receipts in a financial year.
“Revenue receipts have been lower than budget estimates whereas revenue expenditure is on higher side in comparison,” said the official quoted above.
Of the revenue expenditure of ₹95,068 crore in the April-Jan period, ₹73,258 crore, or 77%, has gone into meeting committed liabilities such as salary, pension and subsidy. The total outgo on interest payments stood at ₹15,703 crore, whereas the state government has already used up 91% of its full-year allocation of ₹18,000 crore for pension payment.