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West Bengal, grappling with an acute financial stress, on Friday presented a full-fledged Budget for 2016-17 before the state Assembly, proposing a 9.1 per cent rise in tax collection against the revised figure of 2015-16.
State Finance Minister Amit Mitra proposed a tax revenue of Rs 50,773 crore as against Rs 42,919 crore achieved in 2015-16. The budgeted figure for 2015-16 stood at Rs 46,496 crore. No provision has been made for additional revenue generation for the current fiscal.
Mitra’s Budget statement revealed that the state has failed to achieve its target in terms of collections for tax and non-tax revenue in 2015-16 and would have to rely on central funds for its developmental projects in 2016-17. The increase in central funds during 2015-16, mainly in the shape of a rise in Bengal’s share in Union taxes and duties and grant-in-aid, had helped compensate the deficit to a great extent.
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According to the revised estimates of 2015-16, as opposed to the actual figure of Rs 24,594.95 crore in 2014-15, Centre’s share of Union taxes and duties had risen to Rs 37,163.83 crore. Grants-in-aid from the Centre stood at Rs 20,880.64 crore in 2014-15 while the figure for 2015-16 was Rs 27,406.12 crore.
The Budget estimates revealed that for 2016-17, state’s share in Union taxes and duties and grants-in-aid are Rs 41,861.27 crore and Rs 34,207.54 crore, respectively.
The government, meanwhile, has failed to meet its Budget estimate of tax collection — Rs 46,496.82 crore — and could only achieve Rs 42,919.66 crore in 2015-16. However, it has, once again, set an optimistic target of Rs 50,773.52 crore for 2016-17.
Mitra maintained that unless there was a higher projection, a better goal cannot be achieved. “As long as you don’t set a high target, how do you achieve a better target? There will be higher tax compliance through simplification of tax collection process,” he said.
Mitra, while proposing a number of reforms in finance and tax administration, said that tax exemption limit for low salaried class and wage earners would be Rs 10,000 per month as against Rs 8,500 per month earlier. “To bring down the number of litigations, the state would not go to court where the disputed amount was less than Rs 1 lakh… Besides bringing in relief to thousands of tax payers, it will also bring down administrative costs of revenue collection,” he said.
The minister further said to get TDS benefit, tax payers till now had to furnish a TDS certificate, which led to delay. “I propose to completely dispense with the requirement of submission of paper TDS certificate. It will now be available online,” he told the Assembly.
Mitra extended the industrial promotion assistance scheme for financial support to micro and small enterprises — which had ended on March 31, 2016 — for another three years and proposed to abolish the settlement commission, which was created to settle outstanding VAT and sales tax liabilities from July 1.
Presenting the Budget with a size of Rs 1,29,530 crore, Mitra said the focus areas are social infrastructure, MSME and capital expenditure. Plan expenditure has been raised from Rs 49,000 crore to Rs 53,000 crore.
The Budget has allocated Rs 200 crore to support higher education among lower income groups and Rs 100 crore for setting up virtual classrooms in the government-aided schools and colleges. Budgetary allocation for rural development and panchayat departments has also been raised to over Rs 10,000 crore. Mitra said that during the last financial year, 20 lakh new employment opportunities had been created in the state.
