Monsoon session of UP legislature: Presenting supplementary budget may be a challenge

Any state government move to present the first supplementary budget for 2020-2021 in the forthcoming session of the state legislature may pose a major challenge

Any state government move to present the first supplementary budget for 2020-2021 in the forthcoming session of the state legislature may pose a major challenge to authorities, amid paucity of funds following decline in tax revenue in the fight against Covid-19.

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Under any other circumstances, the state government might have considered presenting a large supplementary budget, making large and token allocations to fund development projects and some populist announcements, as the state is likely to go for assembly elections early in 2022.

“We will be able to come out with a supplementary budget only if the state government is in a position to do so. The state government is yet to take a call on the issue. A decision to present supplementary budget, if needed, will be taken only once a notification about convening the monsoon session is issued,” said a senior state government officer on condition of anonymity.

A formal notification for convening the session is yet to be issued but the state cabinet appears to have decided to convene the monsoon session from August 20. Though a need to present the first supplementary demands of grant for 2020-2021 may be felt, the paucity of funds may not allow the state government the luxury of presenting the first supplementary budget as it has been doing over the years.

“So far we have no indications about presenting first supplementary demands of grant for 2020-2021. If necessary, the size of supplementary budget will be much lower than the previous years,” said another senior officer.

Minister for finance Suresh Khanna was not available for comments. Others in the state government agreed the presentation of first supplementary budget, if necessary, may pose a big challenge to the state government that is already facing fund crunch following decline in collections due to fight against Covid-19. The state government may have to make necessary allocations to fund the chief minister’s announcements and important administrative decisions, like his move to set up a judicial commission to probe issues about killing of eight policemen in Kanpur by Vikas Dubey and subsequent killing of the dreaded criminal by the police in an encounter later.

It may be mentioned that the state government’s major revenue earning departments have failed to meet tax collection targets in the first quarter of 2020-2021. A close scrutiny of the state government’s tax receipts in the first three months indicates that the major departments collected only 37.77 per cent of targeted tax revenue from April 1 to June 30. The state government’s total tax revenue collection in first quarter (April 1 to June 30, 2020) was Rs 15716.48 against targeted tax revenue of Rs 41,602.68 crore. On non-tax revenue front too, the collections were only 37.49 per cent of targets. The state government hopes of improvement in the situation as the collections showed an improvement in June 2020 and earning were about 61 per cent of targets.