Reflecting the tepid recovery in the overall economy, Maharashtra, India’s most industrialised state, had managed to collect revenue of Rs 1,41,213 crore in income between April 1, 2020 and December 8, 2020, statistics show. This is still 59 per cent lower than the Rs 3,47,457 crore it had projected to earn in 2020-21.
Consider this. By December end in 2019, the state had already reported earning totalling Rs 2,14,378 crore, which is 52 per cent higher than the collections so far in the first nine months of 2020.
While there was an upswing in collections from major taxes including GST, excise, stamps and registrations in the third quarter with more reopenings and economic revival measures being announced, officials admitted that this year’s earnings are nowhere near last year’s collections or the budgeted estimates for 2020-21, and admitted that the state is bracing for a huge budget hole.
With the economy showing no signs of an early recovery, state’s tax revenue is 62 per cent below its estimated target and remains a major cause of worry. Just before the coronavirus pandemic struck the state, it had estimated earning of Rs 2,25071 crore from taxable sources. But till December 8, it had collected Rs 86019 crore. Collections from non-tax levies were faring no better. Till December 8, the government has managed to collect only Rs 8,045 crore in non-taxable revenue, which is only 39 pc of its targeted revenue of Rs 20,506 crore.
Worsening matters further, state’s income from grant-in-aid from the Centre and central taxes is 50% and 47% lower than its estimated target. With the coronavirus caseload now seemingly under control, the state government has taken some steps to rev up the economy, but senior officials said that most recent economic indicators such as GST collections, electricity demand etc. suggest that the economy will continue to be sluggish for a while.
In order to rev up demand, the state government has eased existing development curbs for revenue generation and capital spend departments. It has also raised supplementary grants to push capital investment in the public sector. In October, the state’s finance managers had said that an uptick in unemployment rate and job losses remained a major constraint to the revival of the state’s economy. Maharashtra contributes to nearly 14 per cent of India’s Gross Domestic Product.
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