The lockdown-like restrictions introduced in Maharashtra to curb the pandemic’s second wave have slowed down the economy and slashed the revenues of the state government by as much as 23% between April and May. Revenues were down by Rs 4,509 crore in this period, the latest data shows.
The restrictions were introduced at the beginning of April and by the end of the month, the revenues collected were Rs 19,453 crore. By the end of May, the number declined to Rs 14, 944 crore.
With purchasing power hit by the curbs, consumption slowed down and the state’s tax collections plummeted by 30%—from Rs 15,239 crore to Rs 10,675 crore between April and May, a Rs 4,564-crore drop. The taxes include stamp duty and registration fees from real estate transactions, excise collections from liquor sales and motor vehicle tax from the sale of vehicles. The curbs were clamped down on most sectors, barring agriculture, manufacturing, construction and essential services.With expenditure outstripping income, the state’s revenue deficit is Rs 2,981 crore. The total income of the state between April and May was Rs 34,397 crore and expenditure Rs 37,378 crore.
Maharashtra’s borrowings by now are Rs 16,504 crore, mostly open market borrowings.
However, the revenue loss is much lower than it was during the stringent national lockdown last year when most sectors, barring agriculture, were closed. Between April and May 2020, the state’s earnings were just Rs 24,102 crore—43% lower than the income earned during the same period this year.
“During the restrictions this year, we kept manufacturing, agriculture and construction open. The economic hit was not as deep this time,” said a senior finance department official. Also, the official pointed out, the migrant exodus was lower than last year, mainly because the construction sector, which employs a large number of migrants, was kept open.
Surjitt Sahani
