GANDHINAGAR, May 6: Faced with a recurring annual liability of about Rs 1,200 crore as a result of implementation of the Fifth Pay Commission's recommendations, the state government is going to increase various tax and non-tax levies. Already, the government has identified certain fees and cesses to raise about Rs 500 crore. The process of identification of tax heads where a hike can be effected is still on. The revised tax and non-tax levies will be imposed after the first budget of the Keshubhai Patel Government, which is likely to be presented in June, it is learnt.Side by side, the government is going to press the Centre for an early decision on its demand for an increase in the royalty on crude oil, natural gas and lignite from 20 to 40 per cent. The Centre is also being asked to expedite releases from the National Renewal Fund to help the state get rid of loss-making public sector units quickly.Mobilisation of additional resources has become unavoidable for the government following Union Finance Minister Yashwant Sinha's refusal to bale out states by providing them money to pay their increased wage bills. ``It is a difficult situation and something has got to be done quickly,'' said a Finance Ministry officer.However, the government would take care to ensure that the burden of new levies was passed on to affluent sections, the officer said. For example, few would mind if the charges of airconditioned rooms in hospitals were increased, he added.Simultaneously, the government would undertake some belt-tightening and initiate measures to tone up the tax collection machinery. Already, Finance Minister Vajubhai Vala has said that checking on the state's borders would be increased and steps taken to curb bogus billing by traders bringing goods from the Union Territories of Daman & Diu, and Dadra & Nagar Haveli.Last year, the government had made a provision of Rs 600 crore in the budget for pay revision. But the arrears alone totalled Rs 1,500 crore. However, the government got a windfall of Rs 350 crore by way of its share in the collections under the VDIS. The slump in the capital market, which led to diversion of incomes into the small savings sector, also came as a blessing. Gujarat overshot its target by about Rs 450 crore, making the government eligible for a loan of about Rs 300 crore. All this, together with the fact that the government has decided to deposit 50 per cent of the arrears in the general provident fund accounts of the employees, should provide some financial cushion to the government in the current year.Government sources said that while the need for more money for paying salaries could not be over-emphasised, there should be no apprehension that developmental activity would be allowed to suffer.
