CM Siddaramaiah directs officials to be prepared for possible funds crunch

Bengaluru: Chief Minister Siddaramaiah on Friday directed officials of various departments to be prepared to handle potential financial challenges in the coming days.

During a review meeting of the Finance Department, Siddaramaiah reportedly said that though business and transactions have recovered, expenditure was also on the rise. 

“For the current financial year, the total revenue receipts targeted are Rs 2.92 lakh crore, of which Rs 2.08 lakh crore is expected from own tax sources. Two quarters have passed, but revenue collection from own tax sources, including GST has not crossed Rs 1 lakh crore. Hence, he has advised all departments to work more actively,” said a source.

Based on business growth, transactions and the pace of tax collection, the finance department has estimated a potential shortfall of Rs 21,000 crore (Rs 7,000 to Rs 8,000 crore from own tax sources and Rs 13,000 to Rs 14,000 crore due to GST simplification).

Siddaramaiah advised that it is necessary to wait until the end of December to get a clear picture of the impact of GST simplification. “Though there could be a shortfall of Rs 15,000 to Rs 17,000 crore, the CM tasked officials with the responsibility of monitoring market trends and formulating an implementation strategy,” the source added.

“There is a possibility of revenue decline in the coming days,” the source said.

“Achieving a consistent 40% growth to offset the potential shortfall is a tough challenge. Hence, discussions were held regarding alternative stringent measures,” the source informed.

“Even with strict collection and efficiency, bridging the massive shortfall is difficult under current conditions. Opinions were expressed at the meeting that placing non-essential programmes in ‘suspended status’ was among the easier options,” revealed the source.

Siddaramaiah reportedly expressed strong displeasure against excise department officials and said legal and technical hurdles must be resolved quickly and excise licences should be auctioned.

A base price must be fixed for each licence and 500 excise licences should be auctioned to resume transactions, he insisted, according to sources. 

Instructions CM's

• Continuous monitoring of tax evasion and underpayment  

• Inspection of goods transport vehicles across the state including areca nut  

• Periodic review of bank transactions of GST TIN holders  

• Under advanced technology, detection of e-way bill violations and transaction authenticity 

• Surveillance on abnormal transactions and large fund transfers  

• If leakage or evasion is confirmed, issue notice proactively  

• Curb misuse of inactive GST TIN numbers  

• Improve collection in excise, registration, and motor vehicle taxes