The financial shock of the pandemic has left its mark on the budget. The debt projection of Rs 6.15 lakh crore for 2021-22 is 2.7 times the figure in 2011. Interest payments alone will amount to Rs 42,998 crore annually. One third of the debt or 2.1 lakh crore, are expenses on salaries and pensions of state employees.
The extent of the pandemic’s impact is evident from the hit to the state’s income in 2020-21. Revenue was 16% lower than target and tax revenue 20% lower, with a shortfall of Rs 54,918 crore. Borrowings and liabilities shot up almost 60% from a target of Rs 54,721 crore to Rs 87,488 crore.
The revenue deficit which was targeted at Rs 9,510 crore rose by a staggering 385% to Rs 46,177 crore. However, finance minister Ajit Pawar said this was an under-estimation and the revenue deficit would cross Rs 70,000 crore if Central dues including GST compensation did not come in.
“The Centre owes the state GST compensation of over Rs 30,000 crore. Then Central tax transfers have been reduced by Rs 14,000 crore. Of the money we have to be paid in tax transfers, Rs 6,000 crore is yet to come in,” said an official.
In tax collections, the state faced a major shortfall against all targets: GST collections (- Rs 19,146 crore), stamp duty and registration fees (-Rs 8,000 crore), excise dues (-Rs 4,225 crore), sales tax (-Rs 6,000 crore), vehicle tax (-Rs 3,300 crore), SGST (-Rs 3,849 crore), corporation tax (-Rs 5,114 crore), land revenue (-Rs 1,000 crore), customs (-Rs 757 crore), Union excise duties (-Rs 760 crore).
While there has been an uproar over power companies charging exorbitant bills, government’s collection from taxes and duties on electricity is up by Rs 1,700 crore. The budget estimate under this head was Rs 9,500 crore, but revised estimate is Rs 11,200 crore.
Overall, government has cut back on expenditure on several fronts. For general education it was reduced by over Rs 6,000 crore, urban development Rs 5,974 crore, water supply and sanitation got Rs 800 crore less, roads and bridges were allocated Rs 2,325 crore less, compensation and assignment to local bodies was cut Rs 1,991 crore, and for industries, the cut is Rs 754 crore.
But the budget boosts health infrastructure including rural services and proposes setting up post-Covid treatment centres in every district.
Meanwhile, leaders of NCP and Congress will have schemes named after them. The Eastern Freeway will be named after Congress’s Vilasrao Deshmukh while the budget also unveils the Sharad Pawar Gram Samruddhi Yojana.
The Opposition was sharply critical of the whole exercise. “Most of the infrastructure projects in the budget are old schemes which receive funding from the Centre. Why has the government not reduced its steep taxes worth Rs 27 per litre on petrol and diesel,” said BJP leader Devendra Fadnavis. He said, “The budget offers nothing to labourers and daily wagers who were badly impacted by the pandemic.”