Nevertheless, the gap between collections and overall targets remains cause for concern, according to experts
The Uttar Pradesh government on Monday claimed a consistent increase in its revenue recovery, collecting tax of ₹30,156.58 crore from April 1, 2021 to June 30, 2021. The amount represents about 67.3% of the target of ₹44,826.89 crore set for the first quarter of 2021-22.
The state’s total tax collections were ₹10,963.05 crore during the same period in 2020-2021. This sum was about 69.7% of the target of ₹15,721.85 crore. On the non-tax revenue front, the recovery was about ₹1953.43 crore, about 32.2% of the target of ₹6067.85 crore. The state government’s non-tax recovery was ₹1020.63 crore, 50.4% of the target of ₹2026.00 crore.
Uttar Pradesh minister for finance Suresh Khanna expressed satisfaction over revenue collections and said he was hopeful of further increase in the pace of recovery. He gave a breakup of the collections made under different heads and said revenue recovery had improved considerably in June 2021.
The tax and non-tax revenue was ₹11,164.11 crore in June 2021, up by ₹2129.28 crore against collections of ₹9,034.83 crore in the same month in 2020. He said the recovery of revenue from mining and minerals was ₹243.48 crore, 72% of the target of ₹338.00 crore for June 2021. He said it was lower than the amount of ₹337.07 crore recovered in the same month in 2020.
As the Covid-19 restrictions ease further in the coming weeks, the revenue recovery is likely to go up further, though a wide gap between the collections and the targets remains a cause for concern. The state government’s recovery of revenue has increased considerably, but its tax collections in the first quarter were only 16.2% of the annual target. The state government spends a large chunk of its revenue on payment of salaries and pension and the expenditure under this head is likely to go up further.
The state government will need to step up recovery of revenue further in the coming months to fund ongoing development projects and ensure their completion before UP goes into poll mode for the 2022 assembly elections.
“These figures point towards the state government’s economic recovery and it is hoped that this trend will continue in coming months as well. Since the recovery is short of the targets for the period, the state government will need to work to mobilise both tax and non-tax revenue. Augmented revenues will be essential to accelerate developmental activities at this point when the government will be in a hurry to complete the mega projects in coming months in view of coming assembly elections,” said Yashvir Tyagi, former professor at the department of economics, Lucknow University.
The state government may present its first supplementary budget for 2021-22 to fund some of the recent announcements that include schemes for children who have lost their parents to Covid-19. A scheme for Covid-19 affected women, who have lost their husbands, is also being worked out. Chief minister Yogi Adityanath may announce some public welfare schemes and make announcements in coming months as the polls draw closer. The state government will, therefore, have to get ready to make token financial allocations for such schemes and see their implementation before the announcement of the 2022 UP assembly elections.
