Hyderabad: Contrary to the claims of Chief Minister K. Chandrasekhar Rao that the impact of demonetisation on state revenues was not as severe as was first feared, preliminary estimates done by the finance department has put the loss at over Rs 900 crore in November and December 2016.
The department has told the government that if the trend continues from January to March, the total loss would touch Rs 2,250 crore, which would alter the Budget estimates for 2016-17.
It had earlier estimated the loss at Rs 3,000 crore, but recovered some of the losses after the Centre allowed payment of pending taxes and fees in old currency notes. The finance minister stated that a huge swing in revenue earnings was seen in stamps and registration, transport and excise departments since demonetisation .
“The government used to get Rs 15 crore per day on an average through property registrations. It fell to less than Rs 2 crore after demonetisation and increased to Rs 15 crore when the government allowed the use of denotified currency registrations. It again came down to Rs 11 crore and is now at Rs 7 crore. We have never witnessed such a huge swing,” a source in the finance department said.
The commercial taxes department which used to contribute over 70 per cent of state’s own tax revenue, amounting to nearly Rs 40,000 crore per year, is the worst affected.
The department used to contribute nearly Rs 300 crore per day but is struggling to collect Rs 100 crore after demonetisation. The revenues had increased to Rs 200 crore after old notes were allowed in December but fell to Rs 150 crore now, the sources said.
The impact on the transport sector was more with purchase of new vehicles almost coming to a halt in November and December. It used to contribute nearly Rs 80 crore per day which fell to Rs 20 crore in November but recovered in December to Rs 50 crore,” the source said.
The government is confident that the situation would improve in the remaining three months of the financial year since there is a tradition of remitting the taxes by traders in the last quarter.
