The Maharashtra government’s Mid-Term Fiscal Policy has to be tweaked due to shock to the social economic development because of the coronavirus pandemic, change in share in tax devolution as per 15th Finance Commission and increased instances of natural calamities.
Deputy Chief Minister Ajit Pawar said that the government has amended the Fiscal Responsibility & Budgetary Management (FRBM) Act to avail the additional borrowing of 2 per cent of gross state domestic product (GSDP) in 2020-21.
Under the amendment of Maharashtra Fiscal Responsibility and Budgetary Management Rules, the fiscal deficit target for the 2020-21 has been revised to 4 per cent of GSDP from 3 per cent. This is due to increased borrowings amid revenue fall because of coronavirus pandemic induced lockdown and economic slowdown.
Despite the coronavirus pandemic, Pawar said the government will ensure that public investment in priority work like infrastructure, health, agriculture, education and other aspects of the human development is not curtailed.
“The state aspires to grow steadily and believes that growth in infrastructure, agriculture and industry sectors will be the drivers of GSDP,” he added.
Further, to reduce the additional burden on state finances in case the guarantee is invoked, the government has set up a Guarantee Redemption Fund.
The capital expenditure is expected to increase by 34 per cent to Rs 58,748 crore and the revenue expenditure will be Rs 3,79,212.50 crore.
The government proposes to focus on streamlining and strengthening existing tax and non-tax collection. The government’s revenue augmentation strategy involves improvement in tax administration, facility for revenue buoyancy, and rationalization of tax structure. The government will accord priority to increase the rate of tax and non-tax which have not been modified for long.
Pawar said economic activities in the first quarter of 2020-21 were restricted resulting in an unprecedented job loss. However, economic activities have started with a ray of hope in fiscal 2021-22. The government has made additional financial provision under the CM’s Employment Generation Programme and the government is formulating a policy framework for Data Centre and making Maharashtra as the Data Storage Hub of the world.
