With flow of funds from the Union Government slowing down and sluggish market impact on revenue generation has forced the State Government to go for more and more market borrowings to fund several developmental and infrastructure projects.
During 2015-16 the State Government collected Rs.4400 Crore from market, which has went up to Rs.7600 crore in 2016-17 fisacal.
With slow down of central funds flow the State Government started going for market borrowings from 2015-16 after a period of 9 years. Last time the State went for market borrowing in 2005-06.
According to sources the State Government will have to go for more market borrowing to support different welfare schemes as tax and non-tax resources generation did not show any marked improvement during the financial year.
While the State Government committed to provide more funds in the 2017-18 Budget for agriculture, allied, social and infrastructure sectors, with Central assistance almost drying up, the State Government faces a daunting task to fulfill its announcements and take up projects in the development sector.
So far revenue collection is concerned there was less collection of tax and non tax revenue during 2016-17.
While collection of total revenue was Rs.31,238 Crore during 2015-16, it came down to Rs.30,227 Crore during 2016-17.
On non tax revenue State suffered a loss of 14 percent as it collected Rs.7425 Crore during 2016-17, which was Rs.8711 Crore during 2015-16.
Negative growth of non tax revenue is due to reduction in receipt in mining sector, which fetched less than 16 percent in comparison to 2015-16.
During 2015-16, collection of mining royalty was Rs.5798 crore, which went down to Rs.4834 Crore in 2016-17.
For last several years, mining royalty is going down and the State is facing crunch of funds to take up developmental projects, thanks to sluggish market condition in the metal sector.
Own tax revenue also is getting the hit and growth has slowed down. Own tax revenue collection has registered a marginal growth of over One Percent over 2015-16 year.
State collected less revenue from registration fees, stamp duty and land revenue. Lower collection of stamp duty is related less renewal of mining leases, said officials.
Zero Collection from Indian Oil Corporation Limited (IOCL) has impacted the growth of sales tax.
Sales tax collection was Rs.13,096 Crore during 2015-16, which went up to Rs.13,339 Crore during 2016-17.
Under this backdrop spending is going up on development and infrastructure sector as the State is committed to spend more on these sectors.
While the State Government repeatedly urging the Centre to improve the flow of funds looking at the backwardness of the State, fund flow from central kitty is just not improving, for which the state finds no other way to go for more market borrowings, admit officials.