The release of the budget for the fiscal year 2021-22 brings us the crucial task to understand and analyze the contents of the same.
It is important to examine closely the acquiring revenue provision to different states and the contribution to expend money towards crucial areas. The analysis of the budget of 15 states gives importance to deflection from the numbers from the financial year of 2021.
The announcement of the majority of these budgets was made before the lockdown. It also focuses on the increase in the estimated amount for the next year.
The 15 states are Delhi, Gujarat, Kerala, Bihar, Haryana, Karnataka, Madhya Pradesh, Jharkhand, Maharashtra, Punjab, West Bengal, Rajasthan, Odisha, Tamil Nadu, and Uttar Pradesh. Except Odisha remaining 14 states comes under fiscal deficit during the FY21.
After revising the estimation seven states have toppled down from surplus to deficit. The states are Karnataka, Uttar Pradesh, Bihar, Gujarat, Delhi, Jharkhand, and West Bengal. The increase in the revenue defect of Maharashtra is approximately five times than before.
Additionally, Rajasthan and Punjab have closely risen to three times. In contrast, revenue surplus states are namely Karnataka and Gujarat. The reasons resulting in deficits can either possibly due to the rise in the government expenditure amid pandemic or adverse impact on the economy due to the closing down of economic activities.
Thirteen states gave the record of double-digit growth in FY22 in tax revenues than last year. This indicates a boost in economic activities.
For some states, the daunting part is outstanding amounts of debts. States namely Punjab, Kerala, Rajasthan, and West Bengal show a debt of more the 25% of the GSDP.
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