BHUBANESWAR: Even as the State Government has set a revenue collection target of `78,126.76 crore, low collection from value added tax (VAT) and mining royalty is cause of concern.
Claiming that the overall financial situation of the State was satisfactory, the Odisha Economic Survey 2016-17 said demonetisation has slowed down the State’s economy and affected the public finances.
Demonetisation has affected economic activities in informal sectors and more so in manufacturing and services sectors especially in construction, retail trade, transport, hotel and restaurants and communication segments, the report said.
The State has registered about 7 per cent decline in the own tax collection in December, 2016 over the previous month of November.
“Low growth in collection from VAT and mining royalty which are major sources of the State’s own tax and non-tax revenue is the area of concern,” the report said.
There has been a significant improvement in Central transfer of funds comprising State’s share in Central taxes and grants despite restructuring of Centrally sponsored schemes and discontinuance of direct transfer of Central assistance to various implementing agencies.
As per the 2016-17 budget estimate, the State is expected to receive `45,103.78 crore from the Centre which is 57 per cent of the total revenue receipt (TRR) as against `37,703.25 crore in the previous fiscal. Even as the tax structure of the State is changing over the years, the own tax collection has improved while the non-tax revenue is on a declining trend mostly due to fall in the mining revenue receipt.
The own tax revenue of the State to gross state domestic product (GSDP) is expected to fall marginally from 6.59 per cent in 2015-16 to 6.12 per cent.
The collection of sales tax (VAT and CST) which is growing since 2011-12 is expected to reach at 3.59 per cent in the current fiscal. Revenue from VAT and CST has increased by 13.3 per cent upto December 31, 2016 in comparison to the same period of last fiscal. The total collection from VAT and CST was `8,759 crore.