GANDHINAGAR: Owing to the Covid-19 pandemic, the
Gujarat government has lost a sizeable Rs 7,972 crore in the form of central share of taxes in the ongoing financial year. A comparison of the budget estimates (BE) and revised estimates (RE) for 2020-21 of the government of India reflects a huge drop in both central share of taxes and grants for the state.
As far as central share of taxes is concerned, Gujarat was allocated Rs 26,661.7 crore in the Union Budget 2020-21 (BE) while in the RE (revised estimates), the amount has been pegged at Rs 18,689.4, reflecting a lesser allocation of Rs 7,972 crore in the share of central taxes.
The state has been allocated Rs 2,362 crore towards rural local bodies in the 2021-22 Union Budget, a shortfall of Rs 833 crore compared to the allocation of Rs 3,195 crore in the 2020-21 Budget.
Similarly, for urban local bodies, Gujarat has been allocated Rs 1,163 crore in the 2021-22 Budget, Rs 375 crore lesser than the allocation of Rs 1,538 crore in the 2020-21 Budget.
Key sources in the state government informed that after the detailed study of the Budget, it has been realized that Gujarat’s allotment has dropped by at least Rs 10,000 crore. “The allocation to Gujarat is lesser by about Rs 10,000 crore. The cut is mainly in the central government’s share of taxes. We expect that by the end of March, we will only get the amount mentioned in the revised estimates,” a source said.
Sources added that the reduction in allocation of funds will reflect in the state’s budget which is to be announced next month.
Like the Union government, which has witnessed a drop in its revenues because of the pandemic, the state government has also faced loss in revenues in the form of taxes that it collects – mainly VAT on fuel and liquor, stamp duty, registration fees, vehicle taxes and the like.
The upcoming state budget, scheduled on March 3, is bound to reflect both – reduced allocation by the Union government and lesser tax collection in the state.