Maharashtra’s total borrowings for fiscal 2020-21 is estimated at a record Rs 1,13,500 crore against the budget estimates of Rs 81,106 crore, a rise of 37.74%. During April 7, 2020 and March 16, 2021, the state borrowed Rs 69,000 crore against Rs 43,498 crore during April 7, 2019 and March 17, 2020, a rise of 58.62%. The higher borrowings are attributed to dip in revenue collection because of the coronavirus induced lockdown and economic downturn.
The pandemic has resulted in a shortfall in revenue collection. The revenue realization was almost 73.9% of the level of 2019-20 in the initial months of lockdown, though it has improved with the gradual lifting of restrictions starting October 2020. Between April 2020 and January 2021, the state's income was only 54% of its target for 2020-21and it was 20% lower than its income for the corresponding period in 2019-20.
According to CARE Ratings, states and UTs have been resorting to higher market borrowings to meet the shortfalls in their finance’s consequent to the sharp drop in their revenues due to the lockdown led disruptions in economic activity along with the increase in expenditure incurred for controlling and mitigating the impact of the pandemic. Most of the states have seen a notable increase in their market borrowing in the ongoing financial year as against a year ago.
Tamil Nadu, Uttar Pradesh, Maharashtra, Karnataka, Rajasthan, West Bengal and Andhra Pradesh have been the top seven borrowing states, accounting for 61% of the total borrowings thus far in 2020-21.
Further, CARE Ratings said so far in the current fiscal year (7 April 2020 -16 March 2021), 28 states and 2 UTs (Union Territories) have cumulatively raised a total of Rs.7.60 lakhs crore via market borrowings, 30% more than the borrowings in the corresponding period of 2019-20 (Rs 5.86 lakh crore). The states have collectively so far utilized 92% of the scheduled market borrowings of Rs 8.24 lakh crores as per the indicative calendar for 2020-21. In 2019-20, the states had raised an aggregate of Rs 6.35 lakh crore.