Hyderabad: The state government seems to be struggling to achieve the revenue targets it has set for itself in the current 2025-26 financial year. As a result, the coffers are not swelling to the desired extent.

Despite the introduction of several changes in tax collections and plugging the loopholes, the state could achieve only 57 per cent of the target of Rs 1.75 lakh crore by way of tax revenue in the first three quarters till November. The situation is more or less the same in December, the last month of the third quarter. With a little over three months left (March 31), the government remains clueless on achieving the targets and meeting the financial requirements apart from maintaining fiscal discipline in the next financial year 2026-2027.

With the State-Owned Tax Revenue (SOTR) being the main source of funds for the state, the government projected at least a 15 per cent growth in SOTR every year. The budget estimates for 2025-2026 were projected at Rs 1.75 lakh crore revenues from taxes. By the end of the third quarter, the state generated just Rs one lakh crore revenues from taxes that translates to a mere 57 per cent of the target. Incidentally, it was ditto in the last two financial years during which also not more than 57 per cent of revenue targets was achieved till the end of the third quarter.

“The government is increasing revenue targets by at least 15 per cent but only 57 per cent of the target is achieved in every quarter. This is a clear indication that the revenue generation is not progressing well. Some crucial revenue generating wings, mainly stamps and registration and sales tax wings are witnessing sudden downfall in revenue. Except plugging loopholes and finding new avenues to streamline revenue flow, the government has not taken any significant steps to bolster SOTR growth year-on-year”, pointed out senior department officials.

They said that property registrations and sales tax collections dropped suddenly due to market vulnerability. During such times, the state government should have taken some initiatives to maintain sustainable growth in revenue generation. Revenues from liquor sales and transport remained stagnant.

The State Cabinet Sub-Committee on mobilisation of resources has been recommending sale of prime and costly lands to bridge the gap in revenue generation. But the panel has not suggested any other concrete steps to enhance SOTR.