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Direct tax mop-up in Ludhiana declines, Haryana shows rise
January, 28th 2008
If the industrial hub of a progressive state registers a negative growth rate in the collection of direct taxes, it explains the economic health of the state.
 
The Ludhiana circle of Punjab (which includes Ludhiana, Jalandhar, Hoshiarpur and Moga) registered a decline of 4.52 percentage points in the direct tax (excluding TDS) collection from April-December 2007.
 
At the same time there was an increase of 118.60 percentage point in the direct tax collection in Faridabad and Gurgaon, the industrial towns of Haryana.
 
The corporate tax collection in the Ludhiana circle slashed from Rs 276.48 crore to Rs 204.09 crore during this period. Haryana did exceedingly well with Rs 989.96 crore from April-December 2007 as compared with Rs 394.86 crore in the same period last year.
 
The statistics explain the ailing health of Punjabs economy. In the past few years, some of the major industrial houses of the state like Abhishek Industries, Saluja Group, Oswal Group and Sportking expanded in other parts of India and hence no major new investment in the crowded city of Ludhiana was made. Erratic power supply was one of the reason that diverted many investments to the hilly states which also provided tax benefits.
 
The rupee appreciation in the past one year has also squeezed the margins of most of the export-oriented small and medium enterprises (SMEs) in the region.
 
In the past three years Punjab witnessed investments only in the field of real estate and retail where as agriculture and manufacturing remained sluggish.
 
In comparison, the growth in Haryana was driven by the expansion of the information technology, automobile ancillaries and retail sectors.
 
 
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