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State govt records ₹25-K-cr revenue loss; set to worsen
The state government has recorded loss of over ~25,000 crore revenue, due to the Covid-19 outbreak. The first quarter of the new financial year, which began on April
The state government has recorded loss of over ~25,000 crore revenue, due to the Covid-19 outbreak. The first quarter of the new financial year, which began on April 1, is expected to be worse, according to finance officials.
The Maharashtra government had estimated annual revenue of ~2.57 lakh crore from tax revenue at the rate of ~21,400 crore per month. However, given that tax collections are typically more than double in the last month of the financial year, monthly tax revenue was expected to be around ~44,000 crore. According to the preliminary estimates, the state was able to accumulate only around ~19,000 crore due to the major drop in collection of GST, excise and stamp duty following the coronavirus pandemic.
“We were anyway expecting a drastic drop of ~16,000 crore in annual GST due to the slowdown, but the Covid-19 outbreak has now hit it further. Similarly, there will be a drop of ~2,600 crore in excise against the estimated annual revenue of ~17,977 crore. The losses from stamp duty are expected to be more than ~5,000 crore against the estimated annual revenue of ~29,500 crore. The state government’s decision of a 1% reduction in stamp duty had resulted in many homebuyers deferring their plans to the new financial year, hence we were expecting a drop in revenue. However, the pandemic has worsened it,” said an official from the finance department.
Deputy chief and finance minister Ajit Pawar had demanded a special central package of ~25,000 crore, after reviewing the revenue deficit early this week. He also had reminded the Centre of the dues of ~16,654 crore owed towards the devolution of central taxes and grant-in-aide.
The government is expecting April and the first quarter of 2020-21 to be worse with the drop in the collection to more than 60% of its tax revenue.
“Against only one week of lockdown in March, April has two weeks [of lockdown] with no business and revenue. It will take at least a few months for the business and industrial sectors to regularise. It will result in major revenue losses to the government,” the finance department official said.
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