Maharashtra: MVA govt all set to present its second budget today
Deputy chief minister and finance minister Ajit Pawar will on Monday present the Maharashtra Vikas Aghadi’s second budget, which is expected to register a revenue deficit of more than ₹1 lakh crore against the estimated revenue generation of ₹3,47,457 crore, in the backdrop of the Covid-19 pandemic and months-long subsequent lockdown. Although the state has hardly any room left for imposition of new taxes, it is expected to tap the possibility of hike in excise duty on liquor and toll tax on heavy vehicles.
The economic survey of Maharashtra projected the state growth to be -8% in 2020-21 and Gross State Domestic Product to drop by ₹1,56,925 crore. The cumulative figures of revenue receipts show the government could generate ₹197,996 crore (or 57%) till January-end against its estimated generation in the financial year. With ₹50,000 crore expected to be generated from the remaining two months, the state still stares at a shortfall of revenue collection by about ₹1 lakh crore.
“As the revenue generation in the past few months has improved, we may end up registering a revenue deficit of ₹95,000 crore to ₹1 lakh crore. This will result in reduction on the planned spending on development works and social schemes by about ₹40,000 crore. The gap between the revenue deficit and cut to the spending will be made up by the borrowing. The state’s debt burden, which is expected to be ₹5,20,717 crore in 2020-21 from ₹4,64,020 the previous year, may rise heavily the next financial year. It may be around ₹75,000 crore- ₹80,000 crore,” said an official from the finance department.
The state suffered in revenue generation from major heads like GST, excise and stamp duty. “Against the target of ₹1,07,142 crore, the GST generation of the state was ₹54,717 crore till January-end, besides a huge compensation of more than ₹25,000 crore due with the Centre. Revenue generation from stamp duty was ₹17,456 crore by January-end, against the target of ₹30,000 crore. Excise collection was ₹10,989 crore against the target of ₹19,225 crore. In the remaining two months, we expect 70% of the revenue generation target to be achieved. The major drop in GST was a result of the industry and services sectors getting majorly affected during the lockdown,” the official said.
The official said the new projects and schemes are unlikely to be announced as the thrust of the government would be to complete the old schemes announced earlier. The state is however expected to consider reduction in duty and cess on petrol and diesel. It may also announce incentive schemes for farmers paying their loans regularly and one-time settlement plan as part of the farm loan waiver scheme announced earlier.
The state cabinet discussed the budget on Sunday. Ministers were informed about the deficit, GST dues from the Centre and restrictions on levying any new taxes or duties. The state cabinet will meet again at 1pm on Monday for nod to the final budget before it is presented in both the houses at 2pm.
Mumbai University’s economist Neeraj Hatekar said, “The economy is expected to be revived in the next one to one-and-a-half years and the growth will come fast from tier 2 and 3 cities.”