The expected growth of 8.86 per cent in VAT collections is
much lower than the 19.65 per cent growth to be achieved by
end of 2007-08.
As per the explanatory memorandum of the state budget,
Punjab has projected overall growth of 14.79 per cent in total
tax revenue at Rs 11,247 crore for 2008-09.
Rampant tax evasion among traders of the state has been a
cause of serious concern for the government as it has not
witness buoyancy in tax collections despite the fact that
Punjab is a hub of SME industry, an analyst of economic
affairs said.
The poor condition of mobilisation of resources could also
be gauged from the fact that the state government could
collect just Rs 40-50 crore from change of land use charges
and royalty from non-ferrous minerals against the target of
raising Rs 410 crore, which was fixed in budget 2007-08.
Another indicator which has revealed dismal position of
state finances is low tax ratio to Gross State Domestic
Product (GSDP). The tax ratio to GSDP of Punjab has declined
from 8.19 per cent in 2005-06 to 7.91 per cent in 2006-07, as
per budget documents, the analyst said.
The state is also anticipating low growth of 6.02 per cent
from excise levy on auctioning of liquor vends at Rs 1,830
crore in 2008-09, against collection of Rs 1,726 crore in
2007-08. The growth of the same was 26.20 per cent in 2007-08.
