By Bizodisha Bureau, Bhubaneswar, January 27, 2015 ###

Strapped for revenue due to sharp fall in mining royalty collection, loss of revenue on account of fall in oil prices and other taxes, the Odisha government will end with huge revenue deficit at the end of this fiscal, officials said.

Mining royalty, which constitutes the bulk of the state revenue, has come down by about 24% in April-November this year against 2013-14 collection in the same period due to closure of many mines and legal tangle.

Officials said, the target of mining revenue for the year 2014-15 was pegged at Rs.6,346 crore, but the state may end with collection of mining revenue of less than Rs 5000 crore.

“There was decrease in mining revenue collection in the state. However, we are trying to meet the target by March 31 to generate more revenue in the sector. Besides, we stand to lose about Rs.200 crore revenue from petroleum products,” state Finance Minister Pradeep Amat told reporters here.

The cut in oil prices in the wake of falling global oil prices has also led to revenue loss even despite three per cent hike by the state government to offset the revenue deficit.

Even the state government is not pretty sure about the quantum of central assistance which has cast shadow on realistic budget making for 2015-16.

“This is the last year of 13th Finance Commission. The first year of 14th Finance Commission will start in 2015-16. The planning commission has also been abolished and the NITI Ayog has come. So, what would be the impact of central assistance will come only after central budget. We will accordingly fine tune in the supplementary budget,” said additional chief secretary in charge of finance department R. Balakrishnan.

While the state has a target of collection of over Rs.27,886 crore revenue in 2014-15, collection of state tax and non-tax revenue by November stood at Rs.14,919.65 crore, out of which Rs.10,939.92 crore was the tax revenue collection.

The total revenue collection had dipped by 3.69 percent in April-November compared to corresponding period last year, officials said.

Now the state government is focusing on collection of more revenue in the coming budget and curtailing of expenditure. “The government would try to go for amicable settlement with state and central PSUs and others, which have moved various courts against imposition of taxes”, the finance minister said adding, “We are trying to overcome the shortfall and meet the budgeted targets by March this year. The government is making efforts to quicken recovery of arrears from central and state PSUs”.

Commercial tax arrears worth Rs 6,200 crore are still to be recovered by the state government. Central PSUs like Steel Authority of India Ltd, National Aluminium Company Ltd (Nalco), NTPC Ltd, Bharat Heavy Electricals Ltd (Bhel) and Ordinance Factory account for a whopping Rs 1,616.03 crore. As many as 281 cases are pending in respect of arrears against the central PSUs.

This apart, electricity duty arrears worth Rs 1,303.51 crore have piled up and the state government is unable to collect them since the matter is sub-judice.

Before the budget is presented in the state assembly on February 16, the state government is consulting various stakeholders to find out some ways to present a tax free budget

“The stakeholders have given different suggestions including making expenditure outcome oriented. Apart from maximising revenue collection, our focus will be on agriculture and overcoming poverty,” the finance secretary added.