Slump in tax collection worries K M Mani

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THIRUVANANTHAPURAM: Finance Minister K M Mani could be deprived of the safety net of a buoyant tax collection his predecessor Thom..

THIRUVANANTHAPURAM: Finance Minister K M Mani could be deprived of the safety net of a buoyant tax collection his predecessor Thomas Isaac enjoyed.
If the former Finance Minister had adventurously stepped up capital investment during the past two years of his tenure, his confidence sprung primarily from a bullish tax collection. Isaac had estimated tax revenue of Rs 20,884.23 crore in 2010-11, a 20 per cent growth, but when the revised estimate came in, the figure shot up to Rs 21,923 crore, a near 25 per cent growth.This 'revenue cushion', if the tax collection figures of May are anything to go by, might be lost to current Finance Minister K M Mani.

In May, this fiscal, the total tax collection was Rs 1,468 crore. In the corresponding period last fiscal, the figure was Rs 1,241 crore, an increase of Rs 227 crore. But here is the catch: While in May 2010 the rate of growth of tax collection was 24.48 per cent, this fiscal it has surprisingly fallen to 18.72 percent.

"With the change in government there was the threat of mass transfer. A large section of the officials had even ceased to function last month because of the Damocles' sword of transfer hanging over their heads,'' a top Commercial Sales Tax official said. A dysfunctional Sales Tax Department could invite serious financial trouble for Finance Minister K M Mani.

May has already back stabbed Mani and June has reportedly driven the dagger deeper. The tax collections in May this fiscal, however, show a huge rise of Rs 583 crore from the preceding month of April. Even this increase is a bit illusory.