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Demonetisation’s adverse impact visible in State




 The adverse impact of Union Government’s demonetization move has begun to be more visible in the State resulting in fall in collection of revenue and negative growth on both tax and non tax revenue.

While collection of Own Tax Revenue in December 2016 declined by about 11 per cent, it is likely to be low further in January with no improvement in the collection front.

A latest State government report on impact of demonetization reveals that economic activities have been impacted both in the manufacturing and service sector and communications, construction, real estate, transport, retail trade, hospitality and other allied sectors are hit hard by the cash purge move as these sectors are cash intensive. Non- availability of enough new notes has caused steep decline in revenue collection, admits the State Government in its report prepared by the Department of Finance (DoF).

There was less collection of both tax and non tax revenue during December 2016 as compared to November 2016, admit worried officials who also forecast a decline in collection in January month.

Captains of Industry also admit that demonetization has added woes for the Trade and Industry at a time when the market is subdued. They feel supply of notes specially Rs.100 and Rs.500 denomination is needed to be taken care to help economic activity resume.

As per the report, rural areas are still facing the crunch of smaller denomination notes.

Notably, the State Government has urged the Union Government to step up supply of Rs.100 and Rs.500 notes and lift the restrictions on daily and weekly withdrawal limit from bank accounts.

According to sources, the State Government, which is finalizing the Budget Estimates for 2017-18 is worried.

From the beginning of financial Year 2016-17, sales tax collection was sluggish registering only a two per cent growth. It has slid further after demonetization and likely to be acute during January.

Similarly, Excise revenue collection also registered a negative growth as consumption of Beer, Whiskey, Wine and other beverages has gone down.

While Excise revenue collection was targeted to fetch Rs 3300 crore, collection is likely to be around Rs 3000 crore, feel officials.

Senior officials are worried as less funds in the State exchequer will hit funding of infrastructure and social sector while commitment is more, say the sources.

Under this backdrop, State Government has urged to reduce the Central Tax rates and take appropriate measures to encourage manufacturing and other sectors in view of slowdown of economy, said sources.






Editorial

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From asking his party men to ‘live a simple life and serve the people’ to taunting the BJP for its ‘crocodile tears’, Chief Minister and BJD supremo Naveen Patnaik has not only become politically invincible, he seems to be so in the coming years too.

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