The State is heading towards tough times in June in terms of finances as it has several key promises to fulfil.
For uninterrupted implementation of ‘Rythu Bandhu’, farmers’ investment subsidy scheme, the government has to meet the next instalment ahead of the kharif season commencing around the second week when it is expected to credit ₹ 5,000 an acre into the accounts of around 60 lakh farmers amounting to ₹ 7,400 crore.
Expenditure on account of another major head, implementation of revised pay scales to all government staff effective April, is also due entailing an additional expenditure of close to ₹ 1,000 crore a month. Employees are anxiously awaiting the formal orders over the implementation of the new pay scales which are yet to be issued so far.
The two heads are in addition to the regular expenditure for a spree of welfare and developmental programmes operational in the State. Amid the continuing coronavirus (COVID-19) pandemic, the night curfew followed by lockdown with partial relaxation since May 12 have taken their toll on VAT collections on petrol and diesel, property registrations and other key segments.
The Finance department is anticipating a decline in revenues to be between 20 % and 25 % for the first two months of the fiscal year even as uncertainty prevails on whether the lockdown would be relaxed from May 30 or extended. The Finance department is learnt to have working very hard to cope up with the situation for meeting the requirements.
The Government’s decision to opt for open market borrowings to the tune of ₹ 8,000 crore for the first quarter is expected to give some respite from the situation, but it would not be entirely sufficient to meet the requirement of funds. The government had so far mobilized ₹ 5,500 crore as open market borrowings from the RBI, including ₹ 2,000 crore during the auction conducted last Tuesday, and it had option left for another ₹ 2,500 crore.
Finance department officials remained tight lipped when asked about the tight fiscal condition and options that the government proposed to leverage to overcome the situation.
