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Revenue bears slowdown brunt

Bhubaneswar, Dec. 3: The Odisha government today told the Assembly that the tax collection in the state had plummeted because of industrial slowdown in the country.

“While the state’s own revenue collection from own-tax revenue in 2011-12 was 22.07 per cent, higher than previous year, the collection during the corresponding year in the current financial year is only 11.13 per cent high compared to 2011-12,” said finance minister Prasanna Acharya.

Similarly, the collection of the non-tax revenue this financial year so far has been Rs 3,789.91 crore, which was 20.17 per cent higher than the last year. In contrast, the rise in this kind of revenue between 2010-11 to 2011-12 was 54.19 per cent.

At the same time, Odisha’s loan burden has gone up over the years. “It has touched Rs 37,174.89 crore, which was Rs 18,100 crore in 1999-2000,” said the minister.

An official of the finance department said: “The revenue collection has plummeted by 4 to 5 per cent, which indicates that the economy has slowed down.”

Another official said the growth rate of tax collection in the first quarter of financial year should have been 22 to 25 per cent. However, the growth rate had come down to 15 to 18 per cent.

Sources said the ongoing mining scam, which led to closure of a number of mines, played a major role in the slump in revenue collection. “The people employed in mineral sectors have become jobless and the transportation sector has also been affected because of the closure of mines,” he said.

The closure of mines has a cascading effect on various trades starting from the transportation to the hotel industries.

“There is a standstill situation prevailing in the industrial sector. Starting from the expansion works of the Vedanta Alumina to the commencement of the Posco project, all have been stopped. It had its impact on Odisha’s economy,” said an industrialist of Odisha.

President of the Odisha Steel Federation P.L. Kandoi said: “Lack of support from the government’s side has pushed the development works to the backseat. Almost all the mine-based industries are facing a closure because of lack of assured supply of raw materials.”

As industries in Odisha reel from a raw material crisis because of lack of mineral supply, the committee of ministers, headed by Acharya, will meet tomorrow for the second time to find a solution to the problem.

The committee, constituted on October 30 and has industries minister, Niranjan Pujari and steel and mines minister, Rajani Kant Singh as its members, will submit its report by January 30.

Sources said the committee had acknowledged the crisis and traced its genesis to the multicrore mining scam, which had brought operations in over 150 mines of iron ore and manganese to a grinding halt.

The Odisha government has so far signed 89 MoUs with various companies, including 50 for setting up steel pants.

Of these, around 30 steel units, which have already gone into partial production, are passing through hard times with iron ore becoming scarce.