Amid revenue shortfall and constraints in revenue mobilisation due to the coronavirus induced lockdown and economic downturn, the state finance department led by Deputy Chief Minister Ajit Pawar will make a detailed presentation on state finances to the cabinet slated for Wednesday. The finance department has made a strong case of cut in expenditure and recovery of long pending arrears in addition to borrowings.
The finance department has projected that the state may fall short of revenue of Rs 75,000 crore by end of fiscal and if the Centre further delays in clearing GST compensation of Rs 25,000 crore then it will increase to Rs 1 lakh crore. The government will be forced to curtail the Rs 4.5 lakh crore budget by Rs 1 lakh crore. 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.
State has generated revenue of Rs 1.88 lakh crore till January end. Pawar in his annual budget for 2020-21 had set a revenue target of Rs 3.47 lakh crore. In 2019-20, the state had collected revenue of Rs 2.37 lakh crore by end of January 2020 which was 75% of the target.
State’s collection of major taxes is down 53.6% of the target while non tax revenue is 47.3% of the target. Further, the state had received 52% of its target in the share of Central taxes by the end of January against 66% during the corresponding period last year.
Before the coronavirus pandemic struck, the state government had estimated earnings of Rs 2,25,071 crore from taxable sources but by January end it had collected Rs 1,20,698 crore. Pawar in his budget for 2020-21 had estimated the revenue deficit of Rs 9511 crore with total revenue receipts Rs 3,47,457 crore while revenue expenditure of Rs 3,56,968 crore. However, the revenue and fiscal deficits are expected to increase and it may breach the limits under the Fiscal Responsibility and Budget Management Act.
The state government has already raised borrowings worth Rs 73,000 crore during April-December 2020 to meet expenses.
The state finance department has said Maharashtra is expected to get Rs 33,742 crore as its share from the divisible pool in the current fiscal, which is Rs 14,758 crore lower than the originally budgeted amount of Rs 48,500 crore. This is as per the latest revised estimates for tax devolution to states.