IT WAS a bailout in the form of grants-in-aid from the Narendra Modi government at the Centre that rescued Maharashtra from recording its worst fiscal deficit in over two decades.
Revenue collections from sales tax, the state’s biggest revenue earner, were hit by a fall in motor spirits and petroleum prices in 2015-16.
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The Devendra Fadnavis government’s budget plans were further hit when the Rs 3,200 crore that it had planned to raise through land revenue did not fully materialise and the government ended up raising just Rs 1,900 crore.
Amid the revenue shortfall, the government overshot the 2015-16 spend plan due to drought relief work and the contentious decisions to suspend the local body tax (LBT) and partially abolish toll charges on some highways.
While the state anticipated a revenue deficit of 3,757 crore at the start of fiscal 2015-16, the revenue shortfall coupled with the increase in expenditure further widened the deficit gap.
Government’s fiscal managers admitted that at one point the government was staring at a revenue deficit of over Rs 16,000 crore, which would have been the highest ever in two decades.
It would have been a huge embarrassment for the Fadnavis government, which had brought out a white paper and blamed the Congress-NCP regime for leaving the state’s economy in a poor state, to end up with a higher revenue deficit than that registered during the previous government’s reign.
Finally, the Centre increased the grants-in-aid to Maharashtra in 2015-16 from the originally estimated Rs 17,869 crore to Rs 24,982 crore, a nearly 40 per cent hike.
The stamps and registrations and electricity duty were the other saviours, mopping up additional Rs 500 crore each. The state excise department too chipped in, collecting Rs 200 crore more than the target.