Even though Andhra Pradesh has managed to keep away from ways-and-means advances for the fourth consecutive year, state finances are grim. State chief minister, Rajasekhara Reddy, after a review meeting recently, has suggested certain remedial measures to boost revenue collections.
?We are comfortable in the current (second) quarter, though there are a few setbacks in revenue collection,? sources in the revenue department said. For instance, the commercial taxes department targeted to collect Rs 4,529 crore towards value added tax for the first quarter ended June 30; it could net only Rs 4,217 crore.
Officials say since prices of petroleum products have dipped, taxes on petroleum products got reduced approximately by over Rs 220 crore during the first quarter.
A similar fall in the revenue is also seen in the registration department. Against the revenue target of Rs 1,165 crore for the first quarter, it has generated only about Rs 800 crore. Sources said the fall was due to the drop in the number of registrations as people were avoiding property registration as the government had increased the market value of land. People were now favouring unregistered sale agreements.
In a bid to overcome the fall in revenue, the government has proposed some measures.
Even after agreeing to the precondition of repealing the Ceiling Act by World Bank for claiming soft loans for urban infrastructure projects, the state government has now decided not to repeal the Urban Land Ceiling Act. Officials claim they could generate more funds by way of regularisation charges. As per preliminary estimates, the government could raise Rs 400-500 crore in the current year itself by way of regularisation charges.
Also, the state could hold a land bank of 25,000 acre, which could easily generate huge funds for future infrastructure projects, officials say. ?The decision may anger World Bank, which may withdraw (or slow down) finance for urban infrastructure projects taken up in a big way,? an official said.
Besides, the government can also help gullible small buyers who had legitimately bought the ceiling land without knowledge about legalising the property. Thus, the government is benefited both ways – increasing revenue and creating a land bank. The government is also seeking more sale and purchase information from small traders who are claiming less than Rs 5 lakh turnover annually. ?We want to enhance compliance,? officials said.
Further, the government has asked three agencies – APIIC, Urban Development Authorities and AP Housing Corporation – to speed up land sales. In fact, these agencies target a generation of about Rs 2,250 crore in the first quarter through land sale, but could raise only Rs 450 crore since most of the land proposed for sale was mired in litigation.
Officials, putting up a brave front, said there was no dearth of funds for irrigation projects or any other expenditure.