Revenue-earning depts fail to meet set targets

Hyderabad: With just two months remaining in the current financial year 2024-2025, the state government is working tirelessly to meet revenue targets and address economic challenges before the new financial year begins on April 1.

The government has so far achieved only about 70% of the revenue targets set in the budget outlay. Among the five key revenue-generating sectors, significant contributions came from state GST and liquor sales. However, the state-owned tax revenue (SOTR) from VAT, property registrations, and vehicle taxes fell short of expectations due to various factors.

“The efforts of the revenue-generating departments yielded results, but not up to the mark due to several challenges,” officials explained. The Commercial Taxes department faced issues such as workforce shortages and administrative hurdles, impacting its ability to meet revenue goals. The government had set a target of Rs 39,300 crore from state GST and Rs 30,000 crore from VAT collections. While GST revenue reached approximately 80% of the target, VAT collections achieved only about 70%. Efforts are underway to analyze the reasons for not achieving the projected 80% target and to address shortcomings to meet expectations. Officials expressed optimism that pending GST collections from traders would be cleared by the end of March, pushing overall revenue achievement to over 80% before the new financial year begins.

The Transport department, responsible for vehicle tax collections, achieved just 65% of its Rs 8,500 crore target. Officials attributed the shortfall partly to the rising popularity of electric vehicles, which generate lower tax revenues.

Similarly, the Stamps & Registrations department, another key revenue contributor, struggled to meet targets. A slump in the property market at the start of the financial year affected collections significantly. Despite a recovery in the past four months, the department has only achieved about 70% of its Rs 18,300 crore revenue target.

The Excise department emerged as a consistent performer, achieving 80% of its targets every month. However, officials indicated that if the other four major revenue-generating departments fail to reach 70% of their targets, the government may revise revenue estimates downward by at least 30%. Such a revision would have adverse implications for the state's financial health in the upcoming financial year. Despite these challenges, authorities remain committed to improving revenue collections in the remaining two months to mitigate the financial strain.