Amid rising revenue shortfall and limited means of resource mobilisation, the Maha Vikas Aghadi government will present the annual budget for 2021-22 on March 8. This was confirmed by Deputy Chief Minister Ajit Pawar on Monday. Pawar holds the finance and planning department. The government proposes to increase budgetary allocation on health which is currently a paltry 1%. The government is likely to allot more funds for health infrastructure, acquisition of more ambulances, completion of the ongoing construction of hospitals, primary health centers, and other facilities.
Besides, the government is expected to make more allocation in infrastructure development including the power sector, irrigation, education, welfare schemes for SC, ST, and OBCs. The government proposes to raise a loan of Rs 15,000 crore from the Asian Development Bank (ADB) for the construction of roads and another Rs 4,000 crore for upgradation of health infrastructure. However, the state government’s public debt is expected to be over Rs 5 lakh crore.
This will be the MVA government’s second budget after assuming power in November 2019.
As reported by Free Press Journal, the government has estimated a revenue deficit of Rs 1 lakh crore while the fiscal deficit will be 6-7%. The government has already borrowed Rs 73,000 crore during April-December 2020 to meet the revenue shortfall. The government has imposed a 67% cut in the annual plan by keeping 33% for departments to spend.
The state finance department in its presentation made to the cabinet on February 10 had predicted that the revenue shortfall will continue in the new fiscal. The government in the 2020-21 budget had estimated Fiscal Deficit of Rs 54,618 crore which would be 1.69 % of the Gross State Domestic Product. However, it will shoot up to 6 to 7 per cent by the end of March 31, 2021.
Further, the state government had estimated a revenue deficit of Rs 9,511 crore (.029% of GSDP) which will surge to over Rs 1 lakh crore. However, the revenue deficit will be more than 3%.
Between April 2020 and January 2021, the state's income was only 54% of its target for 2020-21and it was 20% lower than its income for the corresponding period in 2019-20. The state has generated revenue of Rs 1.88 lakh crore till January end.