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Dicey Fate? Battle for Uttar Pradesh causes Collateral damage to the state

While it earned Rs 4,494 crore in tax in November, the collection slipped in December and is set to go down further in January and February due to engagement of employees and officials in election duty

Uttar Pradesh
CM Akhilesh Yadav-UP Elections, Source- Wikimedia

-by Mohit Dubey

Lucknow, 14 February 2017: Uttar Pradesh’s revenue has taken a big hit — first due to demonetization and now because most government employees are out on election duty.

Officials in the concerned departments fear that the revenue targets for the current fiscal might take a knock of 25-30 per cent.

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The Sales Tax Department, an official told IANS, has seen a drop in collections in the past three months.

While it earned Rs 4,494 crore in tax in November, the collection slipped in December and is set to go down further in January and February due to engagement of employees and officials in election duty.

The Excise Department, the cash cow, has also taken a beating in revenue collection. An official said that as against a target of Rs 1,443 crore in December, the collection was down at Rs 1,345 crore.

With elections for the 403-seat Uttar Pradesh assembly underway, even sale of liquor has fallen, partly because of strictures from the Election Commission.

The stamp and registration revenue target was Rs 12,130 crore but has been downsized in a big way, with collections dropping to Rs 9,222 crore.

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The target for this month has been scaled down to Rs 13,953 crore from Rs 16,319.60 crore (a loss of Rs 2,366 crore).

The Sales and Trade Tax target has been revised from Rs 57,940.30 crore to Rs 51,508.93 crore.

The ongoing elections have also hit hearings and disposal at revenue courts.

By a conservative official estimate, in Lucknow alone, more than 12,000 cases have come to a halt as officials are on election duty.

All cases being heard in the district magistrates’ courts and other revenue courts have now been given dates after March 14, by when probably a new government would be in place.

Cases pending before officials of five tehsils in Lucknow and others have also been deferred till March.

And with traffic police too deployed on election duty, even traffic in Lucknow is affected.

For about five days, traffic snarls have become the order of the day. A police officer told IANS that 45 Senior Head Constables, 50 Head Constables and 280 Constables have been pulled out for 26 days of election duty.

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Finding itself short-staffed to manage traffic — not to speak of increased VIP movement due to the elections — the traffic department is trying to rope in NCC cadets and Civil Defense wardens to help them out.

The Haj pilgrimage process too has been put on hold in more than one way. The lottery taken out to name the lucky selected ones that usually takes place between March 1 and 8 has been shifted to a later date.

And as politicians are busy campaigning, wooing voters, there are thousands who are hit by election blues and have become collateral damage! (IANS)



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The Answer to The Impending Questions On Demonetization Are Here

While it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

crop loan
Indian Currency. Pixabay

Nearly all of the currency removed from circulation in a surprise 2016 attempt to root out illegal hoards of cash came back into the financial system, Resever Bank of India  has announced, indicating the move did little to slow the underground economy.

Prime Minister of India, Narendra Modi’s currency decree, which was designed to destroy the value of billions of dollars in untaxed cash stockpiles, caused an economic slowdown and months of financial chaos for tens of millions of people or demonetization.

Modi announced in a November 2016 TV address that all 500-rupee and 1,000-rupee notes, then worth about $7.50 and $15, would be withdrawn immediately from circulation. The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about $3,700. The government eventually released new currency notes worth 500 and 2,000 rupees.


An activist of Congress party hold the banned 500 and 1000 rupee notes.


In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money.”

“A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime speech announcement of the order. “There is a time when you realize that you have to bring some change in society, and this is our time.”

But even as the decree caused turmoil for those in India who have always depended on cash — the poor and middle class, and millions of small traders — the rich found ways around the currency switch. In the months after the decree, businesspeople said that even large amounts of banned currency notes could be traded on the black market, though middlemen charged heavy fees.

Prime Minister Narendra Modi along with mayor, flickr

The reserve bank of India report said in its Wednesday report that 99.3 percent of the $217 billion in notes withdrawn from circulation had come back into the economy. Some officials had originally predicted that number could be as low as 60 percent.

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“Frankly, I think demonetization was a mistake,” said Gurcharan Das, a writer and the former head of Proctor & Gamble in India. He said that while it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

“You can’t overnight change that in a country which is poor and illiterate. Therefore, for me it’s not only an economic failure but a moral failure as well,” Das said. (VOA)