Govt. treading cautiously in finalizing budget

The State government is taking time for finalisation of the budget for the next financial year 2021-22 as it has decided to adopt a cautious approach in presenting the annual financial statement keeping the implications on account of several issues in mind.

The first among these issues is impact the implementation of the Pay Revision Commission recommendations will have on the State exchequer. The government is expected to take a call on the fitment benefit and other financial aspects but the focus is said to be more on the mode of payment of the arrears due to employees from July 1, 2018.

“Implications of the PRC are being worked hard. A large contingent of the people have been entrusted the task of examining different aspects, particularly the finance related ones,” a senior official said. Officials are, however, confident that the total outlay for the next fiscal would be on par with the current financial year, pegged around ₹1.8 lakh crore.

There are strong indications that economy is bouncing back and there is strong recovery on the tax revenue front, a senior official told The Hindu. The State’s economic growth rate was expected to cross double digits if the robust growth is any indication. “We are also looking at the Central budget that will be presented on February 1. The Union budget will give specifics about the allocations that will be made to the State and growth indicators for different sectors for the next financial year,” the official said adding planning would be undertaken accordingly.

During a mid-term review of the economic situation conducted by Chief Minister K. Chandrasekhar Rao, officials informed him that the State’s finances suffered heavily on account of the lockdown imposed from the commencement of the current financial year and it took more than six months for putting the economy back on track.

Against the budget outlay of ₹1.8 lakh crore, the State suffered an overall loss of more than ₹52,000 crore. The State’s own tax and non-tax revenues at the end of the first half of the current fiscal dropped by half from an estimated ₹67,000 crore to ₹33,700 crore and there were steep cuts in the devolutions from the Central government in the States’ share of central taxes and the centrally sponsored schemes.

The State’s share of Central taxes between April and October was expected to be around ₹8,363 crore, but the State received only around ₹6,360 crore, down by over ₹2,000 crore. The releases are expected to be no better in the second half of the current fiscal and even if the same level of releases continue till March, indications are that the State would suffer loss of more than ₹4,000 crore.

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Printable version | Feb 27, 2021 4:16:01 AM |

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