The Tribune – Government plans new taxes to wriggle out of crisis

Professional tax, levy on liquor & power

Ruchika M Khanna, Tribune News Service

Chandigarh, 14 July 2017. The cash-strapped Punjab Government will introduce new taxes, recover its dues from big industrial houses who have defaulted on paying loans, and renegotiate the Rs 31,000-crore settlement of the legacy food credit loan, as it takes first steps towards resource mobilisation.

Restructuring of various government departments by bringing their engineering wings under the Public Works Department and increasing the non-tax revenue are the other things being worked out by Finance Minister Manpreet Singh Badal.

A one-time settlement (OTS) scheme to recover dues from defaulters of the PSIDC, Food and Civil Supplies and the Transport departments will be introduced shortly.

Finance Department sources told The Tribune that they were mulling introduction of professional tax on lawyers and doctors, a levy on liquor and additional electricity duty, increasing the Motor Vehicle Tax (MVT), and entertainment tax to be imposed by the local bodies.

The issue has been discussed in various meetings and most top government functionaries agree that some taxes will have to be introduced.

However, this exercise will be done only after September (end of second quarter of this fiscal), as by then the impact of the GST on the state economy, taxes subsumed and the devolution from the Centre, will be clear.

In the first two months of this fiscal, Punjab is showing a revenue deficit of Rs 676.85 crore and a fiscal deficit of Rs 935.01 crore.

Manpreet Singh, while admitting that there have been discussions on introducing new taxes, however, said he would rather raise resources without putting additional tax burden on the people.

He said he had also started cutting down additional government expenditure and hoped to cut it by about 10 per cent this year.

Interestingly, after having closely examined Rs 31,000 crore legacy food credit settlement account, a team of officials of the Food and Supplies Department were today dispatched to Delhi to renegotiate the deal with the Centre.

Sources said the Union Government was being asked to take over at least Rs 6,000 crore of the debt, which would substantially bring down the state’s burden.


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