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The Finance Minister of Gujarat, Mr. Nitin Patel, presented the Budget for the state for the financial year 2021-22 on March 3, 2021.  Note that due to impact of COVID-19, 2020-21 was not a standard year with respect to the performance of the economy and government finances.  In this note, 2021-22 budget estimates have been compared to the actuals for 2019-20 (in terms of compounded annual growth rate or CAGR).  A comparison of the revised estimates for 2020-21 and budget estimates for 2021-22 has been provided in the Annexure.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of Gujarat for 2021-22 (at current prices) is projected to be Rs 18,79,826 crore.  This is an annual increase of 7% over the actual GSDP of 2019-20, and 13.3% higher than the revised estimate of GSDP for 2020-21 (Rs 16,58,865 crore).  In 2020-21, GSDP is estimated to be 12% lower than the budget estimate.
     
  • Total expenditure for 2021-22 is estimated to be Rs 2,23,333 crore, a 10% annual increase over the actual expenditure in 2019-20.
     
  • Total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 1,68,219 crore, an annual increase of 8% over 2019-20.  In 2020-21, total receipts (excluding borrowings) are estimated to fall short of the budget estimate by Rs 30,158 crore (a shortfall of 19%). 
     
  • Revenue surplus for 2021-22 is estimated to be Rs 1,209 crore, which is 0.06% of the GSDP.  In 2020-21, as per the revised figures, revenue deficit is estimated at Rs 21,952 crore (1.32% of GSDP) as compared to a revenue surplus of Rs 789 crore (0.04% of GSDP) estimated at the budget stage.
     
  • Fiscal deficit for 2021-22 is targeted at Rs 30,783 crore (1.64% of GSDP).  In 2020-21, the revised estimate for fiscal deficit is expected to be 3.10% of GSDP, higher than the budget estimate of 1.78% of GSDP.

Policy Highlights

  • Agriculture: Unproductive fallow government land will be utilised for horticulture and herbal crops under Mukhyamantri Bagayat Vikas Mission.  Agriculture Organic Market Scheme will allow farmers to directly sell organic farm produce in urban areas of Ahmedabad, Vadodara, Surat, and Rajkot. Kisan Suryodaya Yojana has been introduced to provide day-time power supply to farmers.
     
  • GIFT City:  Aircraft leasing business carried out of GIFT city and financial transactions done by brokers at the GIFT city have been exempted from stamp duty to attract investment and generate new employment opportunities.  International Mediation and Arbitration Centre will be established at the GIFT city.
     
  • Industry: Bulk Drug Industrial Park will be established at Jambusar and Medical Device Industrial Park will be established at Rajkot to strengthen the pharmacy and medical sector.

Gujarat’s Economy

  • GSDP:  Gujarat’s GSDP (at constant prices) grew at a rate 9.2% in 2018-19, which was lower than the growth rate in 2017-18 (10.7%).
     
  • Sectors:     In 2018-19, agriculture, manufacturing, and services sectors contributed to 17%, 47%, and 36% of the economy.   In 2018-19, agriculture sector contracted by 7.4%.
     
  • Per capita GSDP:  The per capita GSDP of Gujarat in 2018-19 (at constant prices) was Rs 1,75,630, 7.7% higher than in 2017-18.
     
  • Unemployment:  According to the Periodic Labour Force Survey 2018-19, Gujarat has an unemployment rate of 3.2%, which is significantly lower than all-India unemployment rate of 5.8%.

Figure 1: Growth in GSDP and sectors in Gujarat at constant prices (2011-12)

 image

Note: These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation. Agriculture includes mining.

Sources: MOSPI; PRS.

Budget Estimates for 2021-22

  • Total expenditure in 2021-22 is targeted at Rs 2,23,333 crore.  This is an annual increase of 10% over 2019-20.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 1,68,219 crore and borrowings of Rs 50,501 crore.  Total receipts for 2021-22 (other than borrowings) are expected to register an annual increase of 8% over 2019-20.
     
  • As per the revised estimates for 2020-21, total expenditure is estimated to decrease by 10% over the budget estimates.  In 2020-21, receipts (other than borrowings) are estimated to reduce by 19% from the budget to revised stage.  Borrowings in 2020-21 are estimated to increase by 31% from the budget to revised stage.
     
  • The state expects a revenue surplus of Rs 1,209 crore in 2021-22 (0.06% of GSDP).  In 2020-21, revenue deficit is estimated to be Rs 21,952 crore at the revised stage as compared to the revenue surplus of Rs 789 crore estimated at the budget stage.  Fiscal deficit for 2021-22 is estimated to be Rs 30,783 crore (1.64% of GSDP).  In 2020-21, fiscal deficit is estimated to increase to 3.10% of GSDP at the revised stage as compared to 1.78% of GSDP estimated at the budget stage.    

Table 1: Budget 2021-22 - Key figures (in Rs crore)

Items

2019-20 Actuals

2020-21 Budgeted

2020-21 Revised

% change from BE 2020-21 to RE 2020-21

2021-22 Budgeted

Annualised Change (2019-20 to 2021-22 BE)

Total Expenditure

 1,84,563 

 2,14,133 

 1,91,897 

-10%

 2,23,333 

10%

A. Receipts (except borrowings)

 1,43,280 

 1,62,712 

 1,32,554 

-19%

 1,68,219 

8%

B. Borrowings

 43,491 

 46,501 

 61,008 

31%

 50,501 

8%

Total Receipts (A+B)

 1,86,771 

 2,09,213 

 1,93,562 

-7%

 2,18,720 

8%

Revenue Balance

 1,945 

 789 

 -21,952 

-

 1,209 

-21%

As % of GSDP

0.12%

0.04%

-1.32%

 

0.06%

 

Fiscal Balance

 -24,581 

 -33,536 

 -51,381 

53%

 -30,783 

12%

As % of GSDP

-1.49%

-1.78%

-3.10%

 

-1.64%

 

Primary Balance

- 2,133 

- 9,665 

 -26,959 

179%

- 4,861 

51%

As % of GSDP

-0.13%

-0.51%

-1.63%

 

-0.26%

 

Note: BE is Budget Estimates; RE is Revised Estimates. For revenue balance, fiscal balance, and primary balance, positive values indicate surplus and negative values indicate deficit.

Sources: Gujarat Budget Documents 2021-22; PRS.

Expenditure in 2021-22

Capital Outlay

Gujarat’s capital outlay for 2021-22 is estimated to be Rs 30,816 crore, which is annual increase of 10% over 2019-20.  The revised estimate for capital outlay in 2020-21 is Rs 28,454 crore which is 15% lower than the budget estimate.  This includes reduction of Rs 2,754 crore in the allocation towards irrigation and flood control.  This accounts for 56% of the total reduction in capital outlay in 2020-21. 

  • Capital expenditure for 2021-22 is proposed to be Rs 56,572 crore, which is an annual increase of 14% over the actual expenditure in 2019-20.  Capital expenditure includes expenditure affecting the assets and liabilities of the state, such as: (i) capital outlay, i.e., expenditure which leads to the creation of assets (such as bridges and hospitals), and (ii) repayment and grant of loans by the state government.  
     
  • Revenue expenditure for 2021-22 is proposed to be Rs 1,66,761 crore, which is an annual increase of 9% over 2019-20.  This expenditure includes the payment of salaries, pensions, and interest.   In 2020-21, revenue expenditure is estimated to be 5% less than the budget estimate.
     
  • In 2021-22, expenditure on debt servicing is estimated to be Rs 50,252 crore, an annual increase of 13% over 2019-20.  In 2020-21, revised estimate for debt servicing is 22% lower than the budget estimate.

Table 2: Expenditure budget 2021-22 (in Rs crore)

Items

2019-20 Actuals

2020-21 Budgeted

2020-21 Revised

% change from BE 2020-21 to RE 2020-21

2021-22 Budgeted

Annualised Change (2019-20 to 2021-22 BE)

Capital Expenditure

43,664

52,475

37,651

-28%

56,572

14%

of which Capital Outlay

25,651

33,371

28,454

-15%

30,816

10%

Revenue Expenditure

1,40,899

1,61,658

1,54,246

-5%

1,66,761

9%

Total Expenditure

1,84,563

2,14,133

1,91,897

-10%

2,23,333

10%

A. Debt Repayment

16,702

17,885

7,961

-55%

24,330

21%

B. Interest Payments

22,449

23,871

24,421

2%

25,922

7%

Debt Servicing (A+B)

39,150

41,756

32,383

-22%

50,252

13%

Note: BE is Budget Estimates; RE is Revised Estimates.  Capital outlay denotes expenditure which leads to the creation of assets.

Sources: Gujarat Budget Documents 2021-22; PRS. 

Sectoral expenditure in 2021-22

The sectors listed below account for 57% of the total expenditure on all sectors by the state in 2021-22.  A comparison of Gujarat’s expenditure on the key sectors with other states can be found in Annexure 1.  

Table 3: Sector-wise expenditure under Gujarat Budget 2021-22 (in Rs crore)

Sector

2019-20 Actuals

2020-21

BE

2020-21

RE

2021-22

BE

Annualised Change (2019-20 to 2021-22 BE)

Budget provisions 2021-22

Education, Sports, Arts, and Culture

25,202

27,932

27,356

28,503

6%

  • Rs 573 crore has been allocated to Samagra Shiksha Abhiyan and Rs 204 crore has been allocated to Mid-Day Meal Scheme.

Energy

12,310

12,660

13,137

12,895

2%

  • Rs 8,411 crore has been allocated towards subsidy to farmers for electricity usage in agriculture.

Urban Development

11,902

11,828

10,770

11,943

0%

  • Rs 4,563 crore has been allocated to the Swarnim Jayanti Mukyamantri Shaheri Vikas Yojana.
  • Rs 900 crore has been allocated towards Pradhan Mantri Awas Yojana (Urban).

Health and Family Welfare

10,283

11,225

11,232

11,304

5%

  • Rs 1,106 crore has been allocated towards Mukyamantri Amrutum and Ma-Vatsalya Yojana.
  • Rs 404 crore has been allocated towards National Health Mission.

Irrigation and Flood Control

9,804

10,922

7,967

10,137

2%

  • Rs 1,071 crore has been allocated towards the third phase of the Saurashtra Narmada Avtaran Irrigation Yojana and Rs 1,349 crore has been allocated towards irrigation projects in tribal areas.

Transport

8,985

9,302

10,469

9,705

4%

  • Rs 2,893 crore has been allocated for six-laning of the Ahmedabad-Bagodara-Rajkot road.

Agriculture and allied activities

7,349

8,914

8,616

8,752

9%

  • Rs 698 crore has been allocated for intensification of agricultural research and educational programmes in state agricultural universities.

Social Welfare and Nutrition

6,611

6,609

9,293

7,160

4%

  • Rs 1,032 crore has been allocated towards Vrudhdh Pension Yojana, Niradhar Vrudhdh Yojana, and Vaya Vandana Yojana.
  • Rs 939 crore has been allocated towards supplementary nutrition schemes.

Rural Development

5,400

6,986

6,854

6,612

11%

  • Rs 1,250 crore has been allocated towards Pradhan Mantri Awas Yojana (Gramin).
  • Rs 2,011 crore has been allocated towards Mukhyamantri Gram Sadak Yojana.

Police

5,117

6,286

5,380

6,512

13%

  • Rs 5,250 crore has been allocated towards district police forces.

% of total expenditure on all sectors

62%

58%

61%

57%

 

 

Sources: Gujarat Budget Documents 2021-22; PRS.

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.  A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital outlay.   In 2021-22, Gujarat is estimated to spend Rs 78,713 crore on committed expenditure, which is 47% of its revenue receipts.  This is an annual increase of 5% over 2019-20.  This comprises spending on salaries (21% of revenue receipts), pension (10% of revenue receipts), and interest payments (15% of revenue receipts).  In 2020-21, payment towards salaries decreased by 13% and payment towards pension increased by 10% from the budget to revised stage.

Table 4: Committed expenditure in 2021-22 (in Rs crore)

Items

2019-20 Actuals

2020-21

BE

2020-21

RE

% change from BE 2020-21 to RE 2020-21

2021-22 

BE

Annualised Change (2019-20 to 2021-22 BE)

Salaries

 31,845 

 37,420 

 32,680 

-13%

 35,948 

6%

Pensions

 17,663 

 16,114 

 17,668 

10%

 16,843 

-2%

Interest

 22,449 

 23,871 

 24,421 

2%

 25,922 

7%

Total Committed Expenditure

 71,956 

 77,406 

 74,769 

-3%

 78,713 

5%

Sources: Gujarat Budget Documents 2021-22; PRS.
 

Receipts in 2021-22

  • Total revenue receipts for 2021-22 are estimated to be Rs 1,67,969 crore, an annual increase of 8% over 2019-20.  Of this, Rs 1,02,828 crore (61%) will be raised by the state through its own resources, and Rs 65,142 crore (39%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (14% of revenue receipts) and grants (25% of revenue receipts).
     
  • Devolution:  In 2021-22, receipts from the state’s share in central taxes (devolution) are estimated to register an annual increase of 7% over 2019-20.   However, as per the 2020-21 revised estimate, devolution receipts are estimated to decrease by 30% as compared to the budget stage.  This is due to a 30% cut in the union budget for devolution to states, from Rs 7,84,181 crore at the budgeted stage to Rs 5,49,959 crore at the revised stage.
  • State’s own tax revenue:  Total own tax revenue of Gujarat is estimated to be Rs 86,026 crore in 2021-22, an annual increase of 4% over the actual tax revenue in 2019-20.  In 2020-21, as per the revised estimate, state’s own tax revenue is estimated to be 10% lower than the budget estimate.  In 2021-22, state’s own tax to GDP ratio is targeted at 4.6% which is similar to the revised estimate of 4.5% of 2020-21.  This implies that the state’s own tax growth has been at par with the economic growth.

Table 5: Break up of state government receipts (in Rs crore)

Items

2019-20 Actuals

2020-21

BE

2020-21

RE

% change from BE 2020-21 to RE 2020-21

2021-22 

BE

Annualised Change (2019-20 to 2021-22 BE)

State's Own Tax

79,008

82,579

74,645

-10%

86,026

4%

State's Own Non-Tax

18,104

14,600

12,811

-12%

16,802

-4%

Share in Central Taxes

20,232

26,660

18,703

-30%

23,162

7%

Grants-in-aid from Centre

25,500

38,609

26,136

-32%

41,980

28%

Total Revenue Receipts

1,42,844

1,62,447

1,32,294

-19%

1,67,969

8%

Borrowings

43,491

46,501

61,008

31%

50,501

8%

Other receipts

436

265

260

-2%

250

-24%

Total Capital Receipts

43,927

46,766

61,268

31%

50,751

7%

Total Receipts

1,86,771

2,09,213

1,93,562

-7%

2,18,720

8%

Note: State’s Own Tax and Grants from Centre figures have been adjusted to account for GST compensation grants as Grants from Centre.

GST Compensation

The GST (Compensation to States) Act, 2017 guarantees states compensation for five years (till 2022) for any revenue loss arising due to GST implementation.  The Act guarantees states a 14% annual growth in their GST revenue, failing which compensation grants are provided to states to meet the shortfall.  These grants are funded through the GST compensation cess levied by the centre.     As the cess collection is not sufficient to meet the compensation requirement of states in 2020-21, a part of their requirement will be met through loans from the centre (which will be repaid using future cess collection).

As per the revised estimates of 2020-21, Gujarat is estimated to receive a total of Rs 8,765 crore in the form of GST compensation grants which is 18% lower than that in 2019-20.  In 2020-21, the state is also expected borrow Rs 9,222 crore as GST compensation loan.  In 2021-22, the state is estimated to receive compensation grants of Rs 25,666 crore.

Sources: Gujarat Budget Documents 2021-22; PRS.

  • In 2021-22, SGST is estimated to be Rs 36,612 crore, which is the largest source (43%) of the state’s own tax revenue.  This is an annual increase of 4% over the actual SGST revenue in 2019-20.   In 2020-21, revised estimate of SGST is estimated to be similar to the budget estimate.
  • In 2021-22, Gujarat is expected to generate Rs 23,230 crore through the collection of Sales Tax and VAT, an annual increase of 5% over 2019-20.  In 2020-21, the Sales Tax and VAT collection is estimated to decrease by 14% over the budget estimates.

Table 6: Some of the major state’s own tax revenue sources (in Rs crore)

Head

2019-20 Actuals

2020-21

BE

2020-21

RE

% change from BE 2020-21 to RE 2020-21

2021-22 

BE

Annualised Change (2019-20 to 2021-22 BE)

% of Revenue Receipts in 2021-22

State GST

 34,107 

 33,045 

 33,062 

0%

 36,612 

4%

22%

Sales Tax/ VAT

 21,072 

 23,230 

 19,972 

-14%

 23,230 

5%

14%

Taxes and Duties on Electricity

 8,774 

 8,700 

 8,590 

-1%

 8,700 

0%

5%

Stamp Duty and Registration Fees

 7,701 

 8,700 

 6,945 

-20%

 8,700 

6%

5%

Taxes on Vehicles

 3,847 

 4,558 

 2,916 

-36%

 4,558 

9%

3%

Land Revenue

 2,359 

 3,000 

 2,044 

-32%

 2,841 

10%

2%

GST Compensation Grants

 10,647 

 22,515 

 8,765 

-61%

 25,666 

55%

15%

GST Compensation Loans

 - 

 - 

 9,222 

-

 - 

 

-

Note: State’s Own Tax and Grants from Centre figures have been adjusted to account for GST compensation grants as Grants from Centre.

Sources: Gujarat Budget Documents 2021-22; PRS.

Deficits, Debt, and FRBM Targets for 2021-22

The Gujarat Fiscal Responsibility Act, 2005 (FRBM Act) provides annual targets to progressively reduce the outstanding liabilities, revenue deficit, and fiscal deficit of the state government.  

Fiscal Roadmap for 2021-26

The 15th Finance Commission recommended the following fiscal deficit targets for states for the 2021-26 period (as a % of GSDP): (i) 4% for 2021-22, (ii) 3.5% for 2022-23, and (iii) 3% for 2023-26.     The Commission estimates that this path will allow Gujarat to decrease its total liabilities from 30.6% of GSDP in 2020-21 to 29.8% of GSDP in 2025-26.

If a state is unable to fully utilise the sanctioned borrowing limit as specified above in any of the first four years (2021-25), it can avail the unutilised borrowing amount in subsequent years (within the 2021-26 period).  Additional borrowing worth 0.5% of GSDP will be allowed each year for the first four years (2021-25) upon undertaking certain power sector reforms including: (i) reduction in operational losses, (ii) reduction in revenue gap, (iii) reduction in payment of cash subsidy by adopting direct benefit transfer, and (iv) reduction in tariff subsidy as a percentage of revenue.  

Revenue surplus:  It is the excess of revenue receipts over revenue expenditure.  A revenue surplus implies that the government does not need to borrow to finance its expenses which do not increase its assets or reduces its liabilities.  A revenue surplus implies that the revenue receipts of the state are sufficient to meet the revenue expenditure requirements.   The budget estimates a revenue surplus of Rs 1,209 crore (0.06% of the GSDP) in 2021-22.  The 15th Finance Commission has not recommended any revenue deficit grants for Gujarat for the period of 2021-26.

Fiscal deficit:  It is the excess of total expenditure over total receipts.  This gap is filled by borrowings which leads to an increase in total liabilities.  In 2021-22, the fiscal deficit is estimated to be Rs 30,783 crore (1.64% of GSDP).   This is lower than the 3% limit as per the FRBM Act.  As per the revised estimates, in 2020-21, the fiscal deficit of the state is expected to be 3.10% of GSDP, which is higher than the budget estimate of 1.78%.  

Enhanced borrowing limit in 2020-21: Given the situation due to COVID-19, the central government permitted states to increase their fiscal deficit up to 5% of GSDP in 2020-21.  All states have been allowed to increase their fiscal deficit up to 4% of GSDP.  The remaining 1% of GSDP is conditional on the implementation of reforms by states in the following areas (0.25% of GSDP for each reform): (i) one nation one ration card, (ii) ease of doing business, (iii) urban local body/ utility, and (iv) power distribution.  As of February 17, 2021, Gujarat is eligible to borrow Rs 8,704 crore for implementing the first two reforms.

Outstanding debt:   Outstanding debt is the accumulation of total borrowings at the end of a financial year.  In 2021-22, the outstanding debt is expected to be 17.4% of GSDP, lower than the revised estimate for 2020-21 (18.1% of GSDP).   The outstanding debt is estimated to increase from 16.2% in 2019-20 to 17.4% in 2021-22.

Table 7: Budget targets for deficits for Gujarat (% of GSDP)

Year

Revenue Balance

Fiscal Balance

Outstanding Debt

2018-19 (Actuals)

0.2%

-1.8%

16.0%

2019-20 (Actuals)

0.1%

-1.5%

16.2%

2020-21 (Revised)

-1.3%

-3.1%

18.1%

2021-22 (Budget)

0.1%

-1.6%

17.4%

2022-23 (Target)

0.1%

-2.3%

17.5%

2023-24 (Target)

0.1%

-2.3%

17.0%

Note: Outstanding debt includes outstanding debt under Internal Debt, Loans and Advances from Centre, Small Savings, Provident Fund, and Insurance and Pension Fund.  For revenue balance, and fiscal balance, positive values indicate surplus and negative values indicate deficit.

Sources: Gujarat Budget Documents 2021-22; PRS.

Figure 2: Revenue and Fiscal Balance (as % of GSDP) 

image

Note: Negative values indicate deficit and positive values indicate surplus; RE is Revised Estimates; BE is Budget estimates.     Figures for 2018-19, and 2019-20 are actuals, and figures for 2022-23 and 2023-24 are targets.

Sources: Gujarat Budget Documents 2021-22; PRS.  

Figure 3: Outstanding debt targets (as % of GSDP)

image

Note: RE is Revised Estimates; BE is budget estimates.  Figures for 2018-19, and 2019-20 are actuals, and figures for 2022-23 and 2023-24 are targets.

Sources: Gujarat Budget Documents 2021-22; PRS.  

 Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Gujarat’s expenditure on six key sectors as a proportion of its total expenditure on all sectors.  The average for a sector indicates the average expenditure in that sector by 30 states (including Gujarat) as per their budget estimates of 2020-21.[1]

  • Education:  Gujarat has allocated 14.4% of its total expenditure for education in 2021-22.   This is lower than the average allocation (15.8%) for education by all states (2020-21 BE).
  • Health:  Gujarat has allocated 5.7% of its total expenditure on health, which is slightly higher than the average allocation for health by states (5.5%).
     
  • Agriculture:  Gujarat has allocated 4.4% of its total expenditure towards agriculture and allied activities.  This is lower than the average allocation for agriculture by states (6.3%).
     
  • Rural development:  Gujarat has allocated 3.3% of its expenditure on rural development.   This is nearly half of the average allocation for rural development by states (6.1%).
     
  • Police:  Gujarat has allocated 3.3% of its total expenditure on police, which is lower than the average expenditure on police by states (4.3%).
     
  • Roads and bridges:  Gujarat has allocated 4.3% of its total expenditure on roads and bridges, which is same as the average allocation by states (4.3%).
image image image
image image image

Note: 2019-20, 2020-21 (BE), 2020-21 (RE), and 2021-22 (BE) figures are for Gujarat.

Sources: Gujarat Budget Documents 2021-22; various state budgets; PRS.

Annexure 2:  Recommendations of the 15th Finance Commission for 2021-26

The 15th Finance Commission’s (FC) report for the 2021-26 period was released on February 1, 2021.  For the 2021-26 period, the Commission has recommended the share of states in the divisible pool of central taxes to be 41%, same as that for 2020-21 (also recommended by the 15th FC in its report for 2020-21).  This is 1% point lower than the 42% share recommended by the 14th FC (for the 2015-20 period) to separately provide funds for the newly formed union territories of Jammu and Kashmir, and Ladakh.  The 15th FC proposed revised criteria for determining the share of individual states (different from 14th FC).  Based on the 15th FC’s recommendations for the period 2021-26, Gujarat will have a 1.43% share in the divisible pool of central taxes.  This implies that out of every Rs 100 of revenue in the divisible pool during the 2021-26 period, Gujarat will receive Rs 1.43.  This is 10% higher than Rs 1.30 recommended by the 14th FC for the period 2015-20.

Table 8:  Share of states in the divisible pool of central taxes under the 14th and 15th FC periods 

State

14th FC

15th FC

15th FC

% change

2015-20

2020-21

2021-26

2015-20
 to 2021-26

2020-21
 to 2021-26

Andhra Pradesh

1.81

1.69

1.66

-8.2%

-1.6%

Arunachal Pradesh

0.58

0.72

0.72

25.2%

-0.2%

Assam

1.39

1.28

1.28

-7.8%

-0.1%

Bihar

4.06

4.13

4.12

1.6%

0.0%

Chhattisgarh

1.29

1.40

1.40

8.0%

-0.3%

Goa

0.16

0.16

0.16

-0.3%

0.0%

Gujarat

1.30

1.39

1.43

10.1%

2.4%

Haryana

0.46

0.44

0.45

-1.6%

1.0%

Himachal Pradesh

0.30

0.33

0.34

13.6%

3.9%

Jammu & Kashmir

0.78

-

-

-

-

Jharkhand

1.32

1.36

1.36

2.8%

-0.2%

Karnataka

1.98

1.50

1.50

-24.5%

0.0%

Kerala

1.05

0.80

0.79

-24.8%

-0.9%

Madhya Pradesh

3.17

3.23

3.22

1.5%

-0.5%

Maharashtra

2.32

2.52

2.59

11.7%

3.0%

Manipur

0.26

0.29

0.29

13.3%

-0.3%

Meghalaya

0.27

0.31

0.31

16.6%

0.3%

Mizoram

0.19

0.21

0.21

6.1%

-1.2%

Nagaland

0.21

0.24

0.23

11.5%

-0.7%

Odisha

1.95

1.90

1.86

-4.8%

-2.2%

Punjab

0.66

0.73

0.74

11.9%

1.1%

Rajasthan

2.31

2.45

2.47

7.1%

0.8%

Sikkim

0.15

0.16

0.16

3.2%

0.0%

Tamil Nadu

1.69

1.72

1.67

-1.0%

-2.6%

Telangana

1.02

0.88

0.86

-15.8%

-1.5%

Tripura

0.27

0.29

0.29

7.7%

-0.1%

Uttar Pradesh

7.54

7.35

7.36

-2.5%

0.0%

Uttarakhand

0.44

0.45

0.46

3.7%

1.3%

West Bengal

3.08

3.08

3.08

0.3%

0.1%

Total

42.00

41.00

41.00

   

Note: Although the 15th Finance Commission recommended the same criteria for 2020-21 and 2021-26 periods, the reference period for computation on some underlying indicators are different. This is why the share in the divisible pool in 2020-21 and 2021-26 differ for states. State’s share has been rounded off to two decimal places.
Sources: Reports of 14th and 15th FCs; Union Budget Documents 2021-22; PRS.

The 15th FC recommended grants worth Rs 10.3 lakh crore for states over five years (2021-26).  A portion of these grants will be conditional.  17 states will receive revenue deficit grants during this period.     Sector-specific grants include grants for sectors such as health, agriculture, and education.  Grants to local governments include: (i) Rs 1.2 lakh crore for urban local bodies, (ii) Rs 2.4 lakh crore for rural local bodies, and (iii) health grants worth Rs 70,000 crore through local bodies for healthcare infrastructure.  

Table 9: Grants recommended for 2021-26 (Rs crore)

Grants

Total

Gujarat

Revenue deficit grants

 2,94,514

0

Local governments grants

 4,36,361

22,163*

Sector-specific grants

 1,29,987

4,877#

Disaster management grants

 1,22,601

7,316

State-specific grants

49,599

2,860

Total

10,33,062

37,216

Note:  This does not include competition-based grants including *grants for incubation of new cities (part of local bodies grants), and #grants for school education, and aspirational districts and blocks.
Source: Report of 15th FC; PRS.

Grants recommended for Gujarat include: (i) Rs 22,163 crore grants for local bodies, (ii) Rs 7,316 crore grants for disaster management, and (iii) Rs 2,860 crore as state-specific grants in the areas of development of border villages, salinity prevention and desalination plants in Saurashtra and Kutch region, coastal area development, conservation of lion landscape, and for setting up Birsa Munda Tribal University.

Table 10: Taxes devolved to states as per Union Budget 2021-22

State

2019-20

2020-21
 Revised

2021-22
 Budget

Andhra Pradesh

29,421

22,611

26,935

Arunachal Pradesh

9,363

9,681

11,694

Assam

22,627

17,220

20,819

Bihar

66,049

55,334

66,942

Chhattisgarh

21,049

18,799

22,676

Goa

2,583

2,123

2,569

Gujarat

21,077

18,689

23,148

Haryana

7,408

5,951

7,275

Himachal Pradesh

4,873

4,394

5,524

Jammu & Kashmir

12,623

-38

-

Jharkhand

21,452

18,221

22,010

Karnataka

32,209

20,053

24,273

Kerala

17,084

10,686

12,812

Madhya Pradesh

51,584

43,373

52,247

Maharashtra

37,732

33,743

42,044

Manipur

4,216

3,949

4,765

Meghalaya

4,387

4,207

5,105

Mizoram

3,144

2,783

3,328

Nagaland

3,403

3,151

3,787

Odisha

31,724

25,460

30,137

Punjab

10,777

9,834

12,027

Rajasthan

37,554

32,885

40,107

Sikkim

2,508

2,134

2,582

Tamil Nadu

27,493

23,039

27,148

Telangana

16,655

11,732

13,990

Tripura

4,387

3,899

4,712

Uttar Pradesh

1,22,729

98,618

1,19,395

Uttarakhand

7,189

6,072

7,441

West Bengal

50,051

41,353

50,070

Total

6,83,353

5,49,959

6,65,563

Note: Actuals for 2019-20 and Revised Estimates for 2020-21 have been reported in the Union Budget after adjusting for excess or less devolution in previous years.  
Sources: Union Budget Documents 2021-22; PRS.

 

Annexure 3:  Comparison of 2020-21 Revised and 2021-22 Budget Estimates

The following tables compare the budget estimates for 2021-22 with the revised estimates for 2020-21.

Table 11: Key Components of State's Receipts and Expenditure

Particular

2020-21 RE

2021-22 BE

% change from 2020-21 RE to 2021-22 BE

Receipts (1+2)

1,93,562

2,18,720

13%

Receipts except Borrowings

1,32,554

1,68,219

27%

1. Revenue Receipts (a+b+c+d)

1,32,294

1,67,969

27%

a. Own Tax Revenue

74,645

86,026

15%

b. Own Non-Tax Revenue

12,811

16,802

31%

c. Share in central taxes

18,703

23,162

24%

d. Grants-in-aid from the Centre

26,136

41,980

61%

Of which GST compensation

8,765

25,666

193%

2. Capital Receipts

61,268

50,751

-17%

a. Borrowings

61,008

50,501

-17%

Of which GST compensation loan

9,222

-

-

Expenditure (3+4)

1,91,897

2,23,333

16%

3. Revenue Expenditure

1,54,246

1,66,761

8%

4. Capital Expenditure

37,651

56,572

50%

i. Capital Outlay

28,454

30,816

8%

ii. Debt Repayment

7,961

24,330

206%

Revenue Balance

-21,952

1,209

-106%

Fiscal Balance

-51,381

-30,783

-40%

Revenue Balance (as % of GSDP)

-1.32%

0.06%

-

Fiscal Balance (as % of GSDP)

-3.10%

-1.64%

-

Note:  For revenue balance, and fiscal balance, positive values indicate surplus and negative values indicate deficit.

Sources: Gujarat Budget Documents 2021-22; PRS.

Table 12: Key Components of State's Own Tax Revenue

Tax

2020-21 RE

2021-22 BE

% change from 2020-21 RE to 2021-22 BE

State GST

 33,062 

 36,612 

11%

Sales Tax/ VAT

 19,972 

 23,230 

16%

Taxes and Duties on Electricity

 8,590 

 8,700 

1%

Stamp Duty and Registration Fees

 6,945 

 8,700 

25%

Taxes on Vehicles

 2,916 

 4,558 

56%

Land Revenue

 2,044 

 2,841 

39%

Sources: Gujarat Budget Documents 2021-22; PRS.

Table 13: Allocation towards Key Sector

Sector

2020-21 RE

2021-22 BE

% change from 2020-21 RE to 2021-22 BE

Education, Sports, Arts, and Culture

27,356

28,503

4%

Energy

13,137

12,895

-2%

Urban Development

10,770

11,943

11%

Health and Family Welfare

11,232

11,304

1%

Irrigation and Flood Control

7,967

10,137

27%

Transport

10,469

9,705

-7%

Agriculture and allied activities

8,616

8,752

2%

Social Welfare and Nutrition

9,293

7,160

-23%

Rural Development

6,854

6,612

-4%

Police

                           5,380

6,512

21%

Sources: Gujarat Budget Documents 2021-22; PRS.

 

[1] The 30 states include the Union Territory of Delhi and Union Territory of Jammu and Kashmir.

 

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