Despite the impact of coronavirus pandemic on the finances, the Comptroller and Auditor General of India (GAD) has hailed the Maha Vikas Aghadi government’s slew of efforts especially the former finance minister Ajit Pawar’s initiative to contain the fiscal deficit below 3% at 2.69% during 2020-21 against the target of 4%. However, the revenue deficit of Rs 17,116 crore in 2019-20 increased to Rs 41,141.85 crore in 2020-21. During 2020-21, the fiscal liability (total outstanding to debt) to gross state domestic product (GSDP) ratio at 20.15% was higher than the targets prescribed in the Maharashtra Fiscal Responsibility and Budgetary Management Act, 2005.
During the five year period 2016-21, the state could achieve revenue surplus only during Rs 2017-18 and 2018-19.
CAG observed that the extraordinary situation of COVID 19 pandemic, the complete lockdown and then step by sep removal of these restrictions had impacted the economic activities as a result of which GSDP registered a negative growth of Minus 5.57% in 2020-21. The agriculture and allied activities was the only silver lining as it grew by 11.7% but industry reported minus 11.3% growth and service sector minus 9%. Further, during 2016-17 and 2020-21, while there was a decrease in the relative share of industry to GSDP, there was a marginal increase in the relative share of agriculture and service sector.
The outstanding debt (fiscal liabilities) of the state government increased from Rs 3,95,858 crore in 2016-17 to Rs 5,48,176 crore at the end of 2020-21. The outstanding debt grew by 12.43% due to an increase in the outstanding internal debt by Rs 46,903 crore and loans from Government of India by Rs 14,025.29 crore which included Rs 11,977 crore in lieu of GST compensation.
According to CAG, the state’s tax revenue, the major contributor of revenue receipt declined steeply by 13.07% capital outlay decreased by 18.48% and market borrowings increased drastically by 51.59% in 2020-21. The state availed the additional borrowing of 2% of GSDP in 2020-21. However, due to reduced expenditure the state could contain its fiscal deficit to GSDP ratio at 2.69%.
State’s revenue receipts grew at minus 4.85% at Rs 2,69,467.91 crore and the growth of state’s own revenue was negative at minus 11.32% in 2020-21.
