Punjab has shown unprecedented growth in the collection of value-added tax (VAT) and revenues from stamp and registration duties during the current fiscal. The state has registered 40 per cent increase in VAT collections and 24. 8 per cent growth in the collection of stamp and registration duties during the first five months (April to August 2008) of the current fiscal as compared to the corresponding period of the previous year.
The current realisation in taxes is likely to help in improving the fiscal situation of the state to some extent. The state is reeling under a huge debt of Rs 57,000 crore and has a revenue deficit of Rs 1,000.18 crore (budget estimates).
The Punjab government had projected Rs 6,290 crore for 2008-09 as far as VAT collections are concerned, 20 per cent above the VAT collections in 2007-08. During the period April-August the state registered buoyancy in tax collection, mopping up Rs 2,812 crore as VAT, an increase of 40 per cent compared to the corresponding period last year.
Also, revenues from stamp and registration duties jumped by over 24.8 per cent during the period April-August 2008, compared to the corresponding period last year. Collection from stamp and registration duties touched Rs 833 crore as compared to Rs 671 crore during the corresponding period last year.
In an interaction with Business Standard, Punjab Finance Minister Manpreet Singh Badal said, "We are hopeful that by the end of this fiscal, we will be able to achieve our target." He also hinted there were proposals to levy new taxes, proposal for better tax realisations, etc. However he refused to give details.
Also, in order to attract industry, the Punjab finance minister said there was a need to create a land bank of 10,000-20,000 acres in the state for industry because industrialists were reluctant to invest in the state due to exorbitant land prices. Unido has also given recommendations to create a land bank for industrial use in the state.
He said the one area that was a matter of concern for the state was that industrial growth was stagnant and the state was lobbying hard to attract industry. However, he ruled out subsidy for industry.
Badal said the state wanted to invest heavily in primary and secondary education, and health. "We critically need Rs 3,000 crore, which we wish to invest in primary and secondary education and health," Badal said