Officials from the Finance department informed Chief Minister K Chandrashekhar Rao that due to the impact of Corona pandemic, in 2020-2021 financial year, the overall loss to the state amounts to Rs 52,750 Crores of revenue. The officers suggested that due to the heavy fall in the revenues, it is necessary to make alterations, changes and amendments to the State’s 2020-2021 Annual Budget.
The CM held a review meeting with the officials from the Finance department here on Saturday at Pragathi Bhavan to assess the State’s financial condition arising out of the Corona Pandemic. The CM held midterm review of the 2020-2021 Budget. State Planning Commission Vice Chairman B Vinod Kumar, Government’s Chief Advisor Rajiv Sharma, Chief Secretary Somesh Kumar, Principal Secretary (Finance) Ramakrishna Rao, Principal Secretary (revenue) Seshadri, Principal Secretary to CM Narsing Rao, Secretary Smt Smita Sabharwal, Special Secretary (Finance) Ronald Ross, officials from the Finance department attended the meeting. In the meeting, the officials from the finance department explained about the prevailing financial situation due to the Corona Virus pandemic:
The state government received Rs 39,608 Crore revenue for seven months from April to October for the financial year 2019-20 through taxes and other non-tax resources. Till October in 2020-21, the state received only 33,704 Crore. The 2020-2021 Budget proposals were prepared estimating that the state’s revenue growth rate would be 15 percent. But due to Corona, the growth did not reach 15 per cent and on the contrary the revues fell compared to last year.
In 2020-2021 financial year it was estimated that the state would receive Rs 67,608 Crore income through taxes and non-tax resources and the Budget proposals were made accordingly. But as per the current estimates the chances for this year are only Rs 33,704 Crore as the income. With this, the state’s own income will be reduced by Rs 33,904 Crore.
The state government’s share in the Central taxes has also decreased considerably. In the Union Budget it is mentioned that for 2020-2021 financial year, the Centre would allocate Rs 16,727 Crore to the State as its (State’s) share. According to this, the state should get Rs 8363 Crore for the financial year 2020-2021 from April to October. But the state received only Rs 6339 Crore from the Centre. As on date there is a reduction of Rs 2025 Crore in the taxes. By the end of financial year 2020-2021, it is estimated that the state would get Rs 11,898 Crore instead of Rs 16,727 Crore, which was its actual due. With this, the state would lose Rs 4,829 Crore.
Under several centrally sponsored and assisted schemes, the Centre for 2020-2021 financial year has to give Rs 9725 Crore to the state. By this, the state should get Rs 5673 Crore by October but only Rs 4592 Crore was received. There is a loss of Rs 1081 Crore from the central funds that are supposed to be received by October end. By end of this financial year, the state may get Rs 8923 Crore instead of Rs 9725 Crore. There will be Rs 802 Crore cut in the centrally sponsored and assisted schemes’ funds.
The CM said that since there will be a shortfall of Rs 52,750 Crore in the state’s overall income he instructed the officials concerned to fix priorities accordingly and prepare financial management plan.