THIRUVANANTHAPURAM: For a state already troubled by poor revenues, demonetisation has come at the most inopportune time. The finance department estimates that the state would lose at least Rs 1,400 crore revenue in November alone. Top sources, however, assured that salary payments would not be affected. There are indications that demonetisation has wrecked finance minister Dr Thomas Isaac’s stepped up tax mobilisation drive. The finance Department has estimated that by November 15 itself monthly VAT revenue had fallen by Rs 400 crore.
“The fear is that the fall in VAT revenues alone will touch Rs 800 crore this month,” a top department source said. During October, the state’s VAT revenue had grown by 17 per cent, a quantum jump after three months of single-digit growth. During November, the state had been expecting a VAT revenue of Rs 3,200 crore. Treasury operations have virtually come to a standstill. The average daily amount that was deposited in the Treasury after demonetisation was just Rs 17 crore, all of which had come through the online transfer route. Normally, Rs 450-500 crore falls in the state's kitty on a daily basis.
The Centre’s “miserly” approach, too, seems to have intensified the crisis. “In an extraordinary move the Centre has slashed Rs 453 crore of the state’s share of taxes. The revenue deficit grant of Rs 296 crore, too, has been inexplicably withheld. The shortfall of a total of '721 crore has seriously disrupted the functioning of the state treasury,” the official source said.
“Nonetheless, salary payments will not be disrupted,” he added. The average monthly salary outgo is Rs 2,300 crore. Lottery printing has been temporarily suspended and the Lotteries Department estimates a fall in revenue to the tune of Rs 400 crore. With the real estate sector badly hit by demonetisation, the department estimates that the revenue from the sector will fall by Rs 100-150 crore. The department also expects a 40 per cent dip in motor vehicle sales. “The sector provides Rs 200-250 crore monthly. We are bracing for a loss of at least Rs 75 crore,” the official added.
