Telangana govt eyes alternate strategies to boost tax revenue

The tax revenue reached Rs.69,000 crore against the budgeted Rs 1.64 lakh crore, falling short by approximately Rs.13,000 crore as of September 30 and posing a huge challenge for the State government to run the show.

Hyderabad: Facing a revenue shortfall in the first half of the fiscal year, the State government is exploring various strategies to bolster its finances. The officials are considering alternative revenue enhancement proposals, without immediately raising taxes apparently due to the upcoming local body elections. This is after the State managed to achieve only 39.41 per cent of its projected budget revenue, amounting to Rs 1.08 lakh crore out of the Rs 2.74 lakh crore goal set for the 2024-25 financial year.

The tax revenue reached Rs.69,000 crore against the budgeted Rs 1.64 lakh crore, falling short by approximately Rs.13,000 crore as of September 30 and posing a huge challenge for the State government to run the show.

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Under these circumstances, the focus is on increasing liquor sales, where the government sees potential for a substantial boost. Proposals are being considered to hike prices by Rs.20 for beer and by Rs.20 to Rs.70 per quarter bottle of Indian-made foreign liquor (IMFL), to generate an additional revenue of Rs.1,000 crore monthly. If approved, this measure could make up for the tax deficit while sparing property and registration fees from immediate increases.

The government is also looking at monetising assets, specifically by identifying prime land plots for development and auction. All the urban development authorities especially Hyderabad Metropolitan Development Authority, have been instructed to send proposals in this regard. Selling unsold flats constructed under schemes like Rajiv Gruhakalpa in erstwhile Andhra Pradesh, is also on the table. These measures are aimed at raising capital without new tax burdens on the general public.

Efforts to recover pending dues from both the Centre and various organisations have intensified, as Telangana seeks to reclaim funds dating back to the bifurcation of Andhra Pradesh. The government is pursuing payments owed by both public and private entities, and an inter-departmental committee, led by Special Chief Secretary for Finance K Ramakrishna Rao, has been constituted to address disputes involving joint ventures with private companies in housing projects.

Additionally, the government is examining options for a one-time settlement scheme to encourage citizens and businesses to clear outstanding taxes and fines, a move expected to accelerate revenue collection in the short term. However, the officials admit that these are only temporary solutions and the State government must finalise its broad fiscal policy, besides implementing austerity measures, attract fresh investments, and also initiate schemes that would improve financial condition of people to encourage them to spend more.