Gujarat Riots Cost Centre Rs 500 Cr In Tax Revenue

The Centre's revenue collection for 2001-02 may be reduced by Rs 500 crore because of the Gujarat riots. Because the state was supposed to pay one-fifth of its taxes in March when the riots were at their peak, the proceeds were affected significantly, as per the figures from North Block. The impact has been more on the direct taxes.

The state accounted for over 18 per cent of the total tax revenue of the country till 1999-2000. The figure slipped to about 17 per cent in 2000-01 because of the earthquake in January last year. But the riots this year are expected to lower the percentage by another point. As a result, it will be tough for the state to even equal the aggregate tax collection for 2000-01 for the state, which was Rs 34, 021 crore.

Tax records show about one-fifth of the total corporate tax, income tax, excise duty and customs, is collected in March. Therefore, of the projected tax revenue worth Rs 35, 000 crore, nearly Rs 7,000 crore was expected to accrue last month.

Of the total corporate tax collection in the state in 2000-01, Rs 1,051 crore came in March. Similarly, the March figure for income tax collection was Rs 2,135 crore, out of Rs 11,020 crore for the entire fiscal.

For 2001-02, the revenue department projected a corporate tax collection worth Rs 1,033 crore and income tax collection worth Rs 2,618 crore in March.

The government realises a significant portion of its indirect tax revenue too in the last quarter, specially in March.

In the earthquake-affected 2000-01, the drop was 5.61 per cent in the state for excise and 3.15 per cent for customs. Since the level of industrial activity peaks in the last quarter of the year, the adverse impact on revenue caused by disruption is also greater.