BANGALORE: The state’s total debt is expected to cross Rs 1.10 lakh crore as the government has sought the Centre’s permission to raise a fresh loan of Rs 10,827 crore from the open market, according to the Mid-Year Review report on State Finances tabled in the Assembly. However, the Centre has allowed the state to raise only Rs.2,500 crore capital from the open market.
With a total expected shortfall of Rs.2,500 crore at the end of the last two quarters of 2011-12, the state government will be forced to go in for borrowings. A dismal Rs.100 crore is likely to be realised from sale of lands since the real estate market has still not reached the 2007-08 levels.
The government’s estimate of earning Rs.3,674.79 crore is also likely to go haywire as the realisation in non-tax revenue at the end of September 2011 stood at just Rs.1,399.99 crore. The state has suffered a revenue loss of over Rs. 400 crore on account of the ban on iron ore mining.
The mid-year position of receipts of grants in aid and contributions from the Centre stood at Rs. 2,405 crore against the budget estimates of Rs. 8,402 crore for the year.
However, there is a silver lining for the government as the State Own Tax Revenue (SOTR) consisting of four major state tax sources, including commercial taxes, excise, motor vehicles and stamps and registration forecast a better performance.
The SOTR was estimated at Rs. 43,817.10 crore in the budget estimates for 2011-12 and the collection under this during the last six months was placed at Rs. 21,569.51 crore, reflecting a growth of 21 per cent over the corresponding previous period.
Almost all major components of tax revenue have shown better than estimated growth during the first half of 2011-12 and 49 per cent of the budget estimate of SOTR has been achieved in the first half of the financial year.
While the total collection from commercial taxes was expected to hit an excess of Rs. 500 crore for the full year, it would be Rs. 250 crore more than the estimated target under excise and another Rs. 200 crore more from stamps and registrations.
Growth of motor vehicle tax collection would be well around the budget estimate of Rs. 2,630 crore.
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