Punjab sees 15% jump in tax revenue despite sluggish GST
Punjab’s tax revenue stood at ₹17,977 cr in April-June quarter as against ₹15,673 cr during the corresponding period last year
Chandigarh : The Punjab government registered an increase of 15% year-on-year (YoY) in its tax revenue in the first quarter (April-June) of the financial year 2024-25.
The impressive increase came on the back of improved state excise, sales tax and stamps and registration collections and state’s share of central taxes even as the growth in goods and services tax (GST) mop-up remained sluggish during the first three months. The tax revenue stood at ₹17,977 crore in the April-June quarter, up 14.7% from ₹15,673 crore raked in during the corresponding period of the previous year, according to data on key fiscal indicators released last week.
State excise, VAT behind jump
The revenue from state excise has increased by 21.53% in the first three month, rising to ₹2875.35 crore from ₹2365.89 crore a year earlier, while its stamps and registration collection reported 18.41% increase to ₹1408.6 crore from ₹1189.59 crore during the same period. Similarly, the sales tax/value-added tax collection, which comes mostly from sale of petrol and diesel, also went up by 16% this year. The first quarter numbers are in line with the tax revenue growth of 15% projected by the state government in its budget estimates (BE) for the current fiscal.
GST revenue up just 6%
Against a full-year growth of 12% projected by the state government in its budgetary estimate presented in March this year, the GST collection saw an increase of 6% year-on-year between April and June. In the first quarter, the state government mopped up ₹5,353.75 crore from the goods and services tax, which is 20.79% of the collection target of ₹25,750 crore for the current financial year. During the corresponding period of 2023-24, the collection was ₹5,049 crore.
The sluggish growth in GST, which accounts for almost a third of the tax revenue of the state, has not gone unnoticed. A senior taxation officer said they would study the reasons for the single-digit increase. “We have taken steps to enhance monitoring and use technology to plug leakages and will continue these efforts,” he said.
The non-tax revenue, which is collected from government services and remained sluggish in the past, has climbed by 24% to ₹1,396 crore in the first quarter from ₹1,124 crore during the corresponding period last year, but it is still way below the growth targeted by the state government this year. In budget estimates 2024-25, the government raised its non-tax revenue collection target to ₹11,246 crore from last year’s ₹7824 crore.
Capex up, but way below target
Though capital expenditure nearly doubled to ₹853 crore in the first three months from ₹449 crore in the corresponding period last year, it remains abysmally low. The state government has budgeted for ₹7,445 crore this year, its capex spending in April-June period is just 11.46% of the target. The state has repeatedly fallen short of its budgeted capital expenditure in the past five years. In 2023-24, it missed the capex target by 53%.
Capital expenditure is the investment made by the government on creation of assets that are long-term in nature, give a fillip to economic activity and generate additional streams of revenue.