The government is awaiting the nod from the Union Finance Ministry to present the annual budget for 2020-21 sometime in the first or second week of July.
The Legislative Assembly on March 30, passed a vote-on-account for ₹2, 042 crore for the first three months of this fiscal, making it mandatory for the government to present a full budget by early July.
“We need to present the budget in the beginning of July so that we can go ahead with the administrative procedures for salary disbursement for August and also other capital expenditure requirement,” said an official source.
According to him, preparations for budget presentation started towards the end of May with the Department of Planning seeking the views of State Planning Board members on the annual financial statement.
“Due to the restrictions in place to prevent spread of COVID-19, the government did not convene the State Planning Board to prepare the annual draft plan. The government received the views of some members and based on the assessment prepared budget estimates for the current fiscal.”
The budget estimate was forwarded to the Union Ministry of Home Affairs a month ago for approval. “Enquiries by the government reveal that MHA has forwarded the budget proposal to the Finance Ministry for vetting. We are expecting approval anytime,” the official said.
The Centre in its Union budget for the financial year had set aside ₹1,703 crore as assistance for Puducherry.
The Finance Department while preparing the budget estimate had based its calculations mainly on Open Market Borrowings as the government expected a major dip in internal resource mobilisation.
In May, the government could raise only around ₹130 crore while monthly revenue collection stood at around ₹350 crore prior to the lockdown restrictions. And the trend was likely to continue for a few more months, said an official.
“During the current fiscal, much of our expenditure requirement will be met through Open Market Borrowings. The Centre has already raised borrowing limits of States/Union Territories from 3% to 5% of GSDP subject to initiating certain reforms. Before raising the borrowing limit, we were allowed to raise ₹1000 crore this year. Even if we are allowed to borrow 3.5% of GSDP, we can bridge a certain per cent of revenue shortfall,” the official said.