Owing to Covid-19 and the consequent lockdown, the state government spent more than six times its April earnings in releasing salary and pension to its employees and pensioners on May 1. April was the first month of the financial year 2020-2021.
The Uttar Pradesh government releases salary and pension of about Rs 12000 crore-Rs 13,000 crore every month to its 16 lakh employees and teachers and 12 lakh pensioners.
In April, the state government’s tax receipts were only Rs 2012.66 crore or merely 1.2% of the target of Rs 16,6021 crore set for the month. Its non-tax revenue collection was only Rs 282.12 crore against the target of Rs 19,178.93 crore for the month.
The state government now needs immediate measures to augment revenue to meet its committed expenditure in coming months.
“Yes, the state government’s revenue collection has fallen drastically. We are spending our reserves to pay salaries and pension to 28 lakh employees and pensioners. So, we need immediate measures to mobilise additional resources,” a senior officer said.
The state government’s analysis of its annual budget for 2020-2021 indicates an estimated expenditure of Rs 1,24,407.50 crore on salaries of employees in the current financial year. Its estimated expenditure on pension will be Rs 62,062.27 crore during the same period. The state government has already decided to freeze dearness allowance and dearness relief of employees and pensioners respectively from January 1, 2020 to July 1, 2021. It has deferred payment of six allowances to different categories of employees. These measures will save a sum of about Rs 12000 crore in 2020-2021. It has suspended Vidhayak Nidhi for one year and cut the salaries of ministers and legislators by 30% to make additional savings of about Rs 1500 crore in 2020-2021.
{{/usCountry}}The state government’s analysis of its annual budget for 2020-2021 indicates an estimated expenditure of Rs 1,24,407.50 crore on salaries of employees in the current financial year. Its estimated expenditure on pension will be Rs 62,062.27 crore during the same period. The state government has already decided to freeze dearness allowance and dearness relief of employees and pensioners respectively from January 1, 2020 to July 1, 2021. It has deferred payment of six allowances to different categories of employees. These measures will save a sum of about Rs 12000 crore in 2020-2021. It has suspended Vidhayak Nidhi for one year and cut the salaries of ministers and legislators by 30% to make additional savings of about Rs 1500 crore in 2020-2021.
{{/usCountry}}Yet, more measures may be needed soon for greater savings as the prevailing scenario does not indicate a considerable increase in the government revenue.
A breakup of the state government’s receipts in April show that its earnings of Rs 1448.63 crore from Goods and Services Tax (GST) remained at about 29.4% of the target of Rs 4930.28 crore. Its earnings from excise duty was Rs 41.95 crore against the target of Rs 3560 crore. It received Rs 15.60 crore from stamps and registration against a target of Rs 1686.94 crore. It earned Rs 91.03 crore and Rs 45.44 crore from transport and mining against target of Rs 713.62 crore and Rs 300 crore respectively.
“We hope the tax collections and other receipts will go up in coming days with the start of economic activities like plying of transport vehicles and opening of liquor shops. But, the total revenue receipts may not cross the Rs 5000 crore mark and the state government will have to mobilise additional resources,” said the officer.
Chief minister Yogi Adityanath has suggested steps like making government land free hold to increase revenue. He has asked his team to work out a comprehensive plan to attract investment and thereby increase government’s earnings.