The second wave of Covid-19, followed by the lockdown, hit Maharashtra’s finances hard. State revenue in the first half of the current 2021-22 fiscal year represented only 35% of its budgeted estimate of ??3.69 lakh crore.
Almost all of the major contributing sectors, including stamp and registration duties, excise duties, the goods and services tax (GST) and vehicle taxes, have been hit hard, and the situation could lead to an increase deficit and hamper development spending this year. .
Against the estimated turnover of ??3.69 lakh crore, including the Center Aid grant, state collection until September 30 is ??1.29 lakh crore. On the estimated revenue, the fiscal and non-fiscal revenue of the State forecast for the current financial year are ??3.12 lakh crore against which collections by the end of the first half of the year are ??1.11 lakh crore.
Most of the state’s tax revenue comes from GST, sales tax, excise, stamp duty, and vehicle taxes, among others. The generation of the GST in the first six months affected ??41,438 crore against the estimated annual collection of ??1.18 lakh crore. The collections fell slightly to ??7,113 crores in September from ??8,647 crore in August. Revenue from stamp and registration duties has been consolidated at ??11,311 crore against the annual estimate of ??32,000 crore, while the excise duty collected in the first six months is ??6,618 crore against the estimated annual collection of ??19,500 crores.
The state government expects revenue generation to improve in the remaining half of the fiscal year.
“The current fiscal year is much better than the 2020-21 fiscal year (fiscal year) because the revenue until last September was only 28.33% because the collection was ??98,438 crore against annual estimates of ??3.47 lakh crore. The first lockdown was more stringent than the lockdown in the second wave of February-March this year. During the pre-Covid years, revenue collection for the first six months would be around 44%. We expect earnings to improve over the remaining six months as the third wave, in case it hits, is not expected to be as bad as the previous two waves. The collection in the second quarter (quarter 2) of the current fiscal year has improved compared to the receipts of the first three months, ”said an official in the finance department.
The state government is wary of increasing budget deficit and hindering development work. The State estimated a revenue deficit of ??10,226, which could increase substantially due to lower revenues. Contributions over ??38,000 crore towards the Center’s GST compensation may also lead to reduction of funds for development work.
“Spending on development projects was less than 50% of spending, while also this year it should not exceed 70%. This year’s allowance for development work is approximately ??1.30 crore lakh. The ramp-up of health infrastructure in anticipation of the third wave resulted in huge expenditures beyond the budgeted allocation for health infrastructure. This will require embezzlement of funds from other departments, ”said another official.
State Excise Commissioner Kantilal Umap said: “The second wave coincided with the start of a new fiscal year, resulting in a significant drop in excise duties in the first six months. The situation is not as bad as it was last year as our semi-annual excise duty collections are 28% higher than the corresponding period last year. However, we hope to achieve our goal of ??19,500 crore, because traditionally the sale of alcohol improves after October. Also we move ??1,100 crore license fee in March. “