The State is faced with s tight financial situation right from the commencement of the current financial year, thanks to night curfew and subsequent lockdown clamped to contain the spread of the Coronavirus (COVID-19) pandemic.
Though the financial year started on an optimistic note with key revenue earning departments like Excise and Registration and Stamps departments showing signs of strong recovery, imposition of restrictions has hit the revenues adversely. The Registration and Stamps department, for instance, reported revenue of ₹717 crore during April from its earlier lows of around ₹400 crore a month.
The imposition of the lockdown since May 12 led to closure of all activities on the registration front hitting the revenues totally. Imposition of night curfew since April 20, leading to closure of shops, establishments, hotels and other businesses before 8 pm, hit the revenues and this was followed by the lockdown from May 12, which will continue till May 30.
“The situation is tight obviously because of absence of economic activity on account of the pandemic. There is 25% drop in the e-way bills and overall economy likely to take a hit between 20% and 25%,” a senior official told The Hindu . The actual impact on the economy will be known once the numbers are reconciled and the Finance department is in the process of gathering the details.
The tight financial condition through which the State passed the previous financial year could be seen from the figures relating to States’ Finances released by the Reserve Bank of India. According to the RBI bulletin, the State’s investment in Auction Treasury Bills, considered a key liquidity management element was ₹17,414 crore at the end of March 31. The gross market borrowings were to the tune of ₹43,784 crore and net borrowings ₹37,365 crore during the fiscal 2020-21.
The State availed of ₹962 crore through the special drawing facility for 25 days during March and ₹1,147 more crore through overdraft for 18 days. The government did not resort to the ways and means advances for more than five years since the State’s formation owing to its double digit economic growth. But the RBI release said the State availed the facility for 23 days during March amounting to ₹1,556 crore primarily to maintain the prescribed cash balance.
