M A I N   N E W S

300 cr shortfall in IT collection
Chandigarh, Patiala up; Ludhiana down 
Ajay Banerjee
Tribune News Service

Chandigarh, May 7
Collection of income tax in the entire North Western Region (NWR) comprising Punjab, Chandigarh and Jammu and Kashmir has fallen behind fixed targets by a margin of 18 per cent or nearly Rs 300 crore. Meanwhile in the states of Haryana and Himachal, taxmen have just about managed to meet targets.

Various reasons are being cited for the shortfall. A slowdown in the economy; lower tax realisation in March from major tax payers like the State Bank of Patiala on account of VRS payments to bank employees and lower tax collection from Ludhiana. The reasons cited, among other things include poor results by the woollen and textile industry. Meanwhile, the fixation of collection targets also defy rationale.

Interestingly in the NWR the biggest shortfall has been witnessed in Ludhiana (C) — a separate range from the Ludhiana range where big industry of entire state and surrounding areas is assessed. Collections were Rs 51.6 crore behind the target of Rs 132 crore. This was also Rs 10 crore less than the collections last year, registering the only case of negative growth.

The advance tax collections — deposited by the industry on presumptions of sale — have fallen. If last year 45 per cent tax was collected through this route, this year it was a mere 36 per cent. March was the lowest at an abysmal 16 per cent.

For the NWR the Union Finance Ministry had allocated a target hike of Rs 1786 crore for the year ending March 31, 2001. This was a steep Rs 528 crore or 41 per cent more than last year’s target of Rs 1258 crore. The targets are allocated on the basis of a formula of tax collections in previous years. For Haryana and Himachal the target was Rs 754 crore and it has been achieved, says Mr J.S. Ahluwalia, Chief Commissioner of NWR, holding additional charge of Haryana and Himachal.

Meanwhile sources have pointed out that the hike in budgetary allocation was one of the steepest for NWR at 41 per cent over last year and 34 per cent over last year for Haryana and Himachal. The national average of the hike in budgetary allocation works out to be 30 per cent. And interestingly Chandigarh was allocated the highest jump over last year. From Rs 212 crore to Rs 348 crore, a whopping rise of about 60 per cent.

The NWR region comprises Chandigarh, Punjab and Jammu and Kashmir. While allocating budget amongst various commissioners in charge of the NWR, Chandigarh was allocated the highest increase, 60 per cent over the budget in 1999-2000, whereas other commissioners of Punjab were given an increase varying from minus 26 per cent to 36 per cent Ludhiana was given an increase of only 7 per cent.

Mr Ahluwalia, Chief Commissioner of Income Tax, NWR, in his interview stated that he could not comment on the rationale of allocating the budget target amongst units charges as this was done by his predecessor, Ms Surinder Pal Kaur.

In the case of Jalandhar and Ludhiana, the rise in collections over last year was Rs 25 crore and Rs 43 crore, respectively. Both being major industrial centres the rise is not much. Mr Ahluwalia explains this saying: “The Ludhiana industry has done badly due to a short winter while in Jalandhar major industrial houses are showing a decline in revenue.”

This explanation on prima facie is not tenable, as the hosiery industry if not making woollens are manufacturing cotton clothes. Then there is a cycle industry and Ludhiana is known as the Manchester of India and is the most prosperous city of Punjab.

Interestingly, Chandigarh which is primarily a city of the salaried class, showed a collection of nearly Rs 37 crore more than last year. Last year the Chandigarh in charge had collected 245 crore and for the year ending March 2001 he has already collected 280 crore, according Mr Ahluwalia. This shows an increase of 15 per cent approximately over last year’s collections. In the year about two lakh new assessees were added in the region but this did not help much. Another 1.25 lakh were added for Haryana and Himachal.

There is no fast growing industry in these states and assessees are smalltime earners. With the agricultural sector not doing very well, it has had a spin-off affect on all sections of the economy, stresses Mr Ahluwalia.

In this dismal scenario how have Haryana and Himachal managed to meet the targets? The Chief Commissioner says, top and fast growing companies like Himachal Futuristic Communication Limited (HFCL) and Morepen Laboratories are today assessed in Himachal. The two states have been divided into three ranges with Panchkula, Rohtak and Shimla being the respective headquarters. All the three ranges have met their targets totalling Rs 754 crore.