Updated: March 2, 2021 8:56:42 pm
As Gujarat’s Finance Minister Nitin Patel is going to present the state Budget for the ninth time in the state legislature on Wednesday, the Rs 50,000 crore that the state government borrowed during the ongoing 2020-21 fiscal will be on the back of his mind.
On an average the state government’s gross borrowing has been in the range of Rs 35,000-40,000 crore. Of these Rs 15,000-20,000 crore is used for the repayment of earlier loans (principal amount). This year, due to the Covid-19 pandemic, the borrowings have almost touched Rs 50,000 crore.
“The shortfall in revenues that occurred in the months of April and May 2020, has still not been recovered, and the gross borrowings have touched Rs 50,000 crore,” an official said.
In May 2020, the Centre had raised the borrowing limits for states for the current fiscal to five per cent of the Gross State Domestic Product (GSDP), from the earlier three per cent. This was done to allow states to borrow more from the market to finance pandemic-related expenses.
The Gujarat government in the ongoing Budget session will be tabling The Gujarat Fiscal Responsibility (Amendment) Bill, 2021 which will replace an existing ordinance, which allows additional borrowing for the state.
In February 2020, Nitin Patel had presented a Rs 2,17,287 crore Budget for the year 2020-21. A portion of this Budget which is expected to remain unspent due to Covid-19 is expected to be double the average unspent amount that is witnessed annually.
“Every year 5-7 percent of the budgetary allocation remains unspent for various reasons. This year, we expect the unspent allocation to be little more at 10-12 percent,” the official said adding that the Wednesday’s Budget will present revised estimates for the current fiscal.
Gujarat Governor Acharya Devvrat too while addressing the state legislature on the opening day of the Budget session on Monday pointed that the last year’s “budget allocation to different departments have not been completely utilised” due to the hurdles posed by the Covid-19 pandemic.
This month, the government is expected to spend a sizeable amount. “The economic indicators during the last 4-5 months have been good. The initial fear was that the economy would be badly hit. But the economy is on a path of recovery. From the government’s side there is no restrictions on utilisation of budgetary provisions. Secondly, there is also a typical tendency to spend maximum the last month of March,” the official added.
During last year’s Budget, the focus was largely on rural development and industry. It is expected to be on similar lines this year as well.
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