VIJAYAWADA:AP’s finances seem to be turning around. The gap between TS and AP as far as tax revenues are concerned has narrowed down to just 1 per cent. It used to be somewhere around 2 to 4 per cent in the beginning, according to finance minister Yanamala Ramakrishnudu.
After Telangana was created last year, AP had a bad start. With less population, Telangana had more revenue and AP with more population had less revenue and more liabilities. “Now the situation, though not out of woods yet, is looking up,” Ramakrishnudu said at a review of commercial taxes department here on Saturday.
He, however, sounded a word of caution to the commercial taxes department officers. “There is no room for complacency. You should keep in mind that tax revenue is about Rs 44,000 crore but the the bill that I am picking up for paying salaries and pensions is going up to Rs 42,000 crore,” he said.
Referring to 42 per cent fitment benefit for employees, he said though it was a quite a burden, the government had done it. Now it was the turn of employees to put in more efforts, he said and added “The additional burden on the state’s exchequer will work out to Rs 5,000 crore.” He pointed out that the commercial taxes revenue was the major contributor to the state exchequer followed by the Excise department and called upon the department to reach the target of Rs 33,000 crore which was about 29 per cent more than in the previous year. If the state’s total receipts were Rs 90,000 crore, commercial taxes had the lion’s share, he said.
He ruled out the possibility of borrowing more since the Fiscal Responsibility and Budget Management Act, 2003 would allow the state to go in for not more than Rs 17,000 crore. This had placed a responsibility on us to augment non-tax revenue for which there was tremendous scope in Andhra Pradesh. “For instance, the sale of red sanders fetched the government Rs 800 crore while sand mining brought Rs 1,000 crore,” he said.
Referring to reforms in VAT, he said that GST would be in force in its place from 2016-17 as the Centre as well as the states had agreed on the need for uniform taxation policy across the country which the investors abroad were willing to set up units in the country were seeking.
A constitutional guarantee would be provided to the states for compensating the loss they would suffer. “We are asking for five years but compensation may be given for three to four years,” he said adding that the empowered committee which would meet in Kerala on May 7 and 8 would discuss several aspects of the GST.
The finance minister, referring to increase to 42 from 32 per cent of states’ share in the divisible pool of Central taxes, said that it may not be as attractive as it once looked. Earlier, the states were getting 32 pc share in divisible pool of the Central taxes and grants-in-aid. Now the share was hiked to 42 but grants-in-aid were withdrawn.
C T Collection (2014-15)
Target Rs 11,384 crore
Achieved Rs 10,114 crore
Growth 19 per cent over 2013-14