Maharashtra’s public finances are under severe strain with a rise in debt stock, falling revenue and increasing fiscal deficit. Against the estimates of the revenue receipts of Rs 3,47,457 crore in 2020-21 (BE), the actual mobilisation will be Rs 1,76,450 crore till December, compared to Rs 2,14,376 crore during the corresponding period in 2019-20. This is because of the lockdown and economic slowdown. The expected fiscal deficit in 2020-21(BE) is 2.1% of GSDP.

According to the Economic Survey, the revenue expenditure, however, is expected to surge at Rs 3,56,968 crore in 2020-21 against Rs 3,41,324 crore in 2019-20. Of the Rs 3,56,968 crore, the state government’s outgo towards salary will be Rs 1,17,473 crore (32.9%), pension Rs 38,467 crore (10.8%), interest Rs 35,531 crore (10%), subsidy Rs 31,517 crore (8.8%), grants in aid (non-salary) Rs 95,639 crore (26.8%) and other Rs 38,341 crore (10.7%).

Revenue expenditure is expected to increase by 4.6% in 2020-21(BE) over the previous year. The development revenue expenditure is a major component of revenue expenditure with an expected share of 68.7% in 2020-21(BE) (average share of 67.7% during the last five years).

The total revenue expenditure of the state during 2020-21 up to December was 55.0% of the budget estimates. Development expenditure incurred up to December was 51.2% of 2020-21 (BE). Of the total development expenditure, expenditure incurred on social services was 49.2% and expenditure incurred on economic services was 50.6% of 2020-21 (BE).

The share of capital expenditure in the total expenditure is expected to be 17.8% in 2020-21 (BE). Development capital expenditure includes expenditure on capital account and loans and advances given by the state. The expected share of expenditure on capital account in capital expenditure is maximum (58.5%). Out of the total capital expenditure, internal debt expected to be used for repayment is Rs 28,521 crore.

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Free Press Journal