Nation Current Affairs 11 Nov 2016 Finances worry Telan ...

Finances worry Telangana, AP after scrapping of Rs 500 and Rs 1,000 notes

DECCAN CHRONICLE. | S N C N ACHARYULU
Published Nov 11, 2016, 1:34 am IST
Updated Nov 11, 2016, 6:57 am IST
Officials said that the move would affect the states’ revenues, mainly from stamps and registrations and Excise.
People queue up to collect cash and to deposit demonetised currency notes in front of banks in the city on Thursday. (Photo: S. Surender Reddy)
 People queue up to collect cash and to deposit demonetised currency notes in front of banks in the city on Thursday. (Photo: S. Surender Reddy)

Hyderabad: The two Telugu states are worried about their tax revenues due to discontinuation of Rs 500 and Rs 1,000 notes. Officials said that the move would affect the states’ revenues, mainly from stamps and registrations and Excise.

The Central government meanwhile has cut the two states’ share of tax devolutions this month, leading to AP losing Rs 790 crore and TS Rs 400 crore. AP gets about Rs 3,500 crore and TS Rs 5,000 crore through tax and non-tax revenues every month.

 

No registrations have been done in the last two days and business establishments too have been affected in both states. Officials estimate that each state might thus lose Rs 500 crore in revenues this month.

Both states are facing financial crises and not paying pending bills. The total worth of pending bills in TS has crossed Rs 1,000 crore and in AP it has crossed Rs 1,200 crore. The TS government had borrowed Rs 3,000 crore last Tuesday for the loan waiver scheme of farmers. The AP government too borrowed Rs 1,500 crore on Tuesday for distribution of DWACRA groups.

 

Under the states’ share in tax devolutions, the Centre releases about Rs 1,000 crore every month to TS and Rs 1,760 crore to AP. But this month, the Centre has released Rs 600 crore to TS and Rs 970 crore to AP. Both state governments are thus not clear about how much funds will be released by the Centre under tax devolutions in December.

Through its own tax revenues, TS earns about Rs 5,000 crore and AP Rs 3,500 crore every month. But due to the Central government’s decision of discontinuing large currency notes, business in both states has been affected. Land transactions and real estate business have come to a standstill.

 

With no registrations, the states’ revenues through stamps and registrations will come down, as will revenues from excise and commercial taxes. Officials say  it will take at least 10 days for normalcy to return.

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Location: India, Telangana, Hyderabad




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