15-day lockdown to cost state nearly ₹2,900 crore

15-day lockdown to cost state nearly ₹2,900 crore

Yogesh.Kabirdoss@timesgroup.com

Chennai:16.05.2021

The 15-day complete lockdown, which was intensified from Saturday, will cost the state government at least ₹2,900 crore in revenue. It may have a partial impact on the government's expenditure in the event if the intensified lockdown is extended beyond May 24. To compensate the revenue loss, the government could effect a revision in liquor prices, which has not been hiked for the past one year, say financial experts.

Usually, Tasmac liquor shops and registration offices would have collectively contributed revenue of nearly ₹2,500 crore in 15 days. Of this, property registrations account for an average of ₹500 crore.

The loss of the registration department is based on the three months’ revenue through land registrations. Since February, property registrations brought in an income exceeding ₹1,000 crore every month. Losses through royalty from mines is estimated to be another ₹25 crore for a fortnight, according to official sources with the mines department.

Fuel stations are said to be witnessing a drop in sale of petrol and diesel by about 70% to 75%. The corresponding VAT and other service taxes loss for the state is at least ₹386 crore in 15 days. The losses on VAT and service taxes is for approximately 3,675 fuel stations of the 4,900 fuel stations functioning in Tamil Nadu, which records an average sale of about1.5 lakh litres of petrol and diesel per month.

City-based fuel station dealer Suresh said the volume of sale in petrol and diesel now was just 25% to 30% of the normal sale.

Former state chief internal auditor and ex-treasurer of the Tamil Nadu Government Employees Union A Mohan said about 60% of government revenue receipts is spent towards salary, pensions and those relating to government’s administrative expenditure. The remaining 40% goes to various welfare measures.

Noting that the major spending for the present government will be for public health and sanitation, he said, “The immediate partial impact will be on public health because there could be no major expenditure during this period in the other sectors.”

Tasmac is the only source of revenue post lockdown. “After lifting the lockdown, there could be an increase in liquor because that will not lead to a public outcry. If the government is going to increase taxes on fuel that will become an issue,” he said. Liquor prices were revised twice in 2020 including increasing15% on excise revenue.