The Finance Minister of Maharashtra, Mr. Ajit Pawar, presented the Budget for the state for the financial year 2021-22 on March 8, 2021.  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 Maharashtra for 2021-22 (at current prices) is projected to be Rs 29,81,024 crore.  This is an annual increase of 3% over 2019-20.  As per the revised estimates, in 2020-21, GSDP is estimated to decrease by 6% over the previous year (against an estimated growth of 12% at the budget stage).
     
  • Total expenditure for 2021-22 is estimated to be Rs 4,84,091 crore, an annual increase of 13% over 2019-20.  As per the revised estimates, total expenditure in 2020-21 is estimated to be 1% higher than the budget estimate (an increase of Rs 3,306 crore).
     
  • Total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 3,71,319 crore, an annual increase of 14% over 2019-20.  In 2020-21, total receipts (excluding borrowings) are estimated to fall short of the budget estimate by Rs 57,959 crore (a decrease of 17%).
     
  • In 2021-22, the revenue deficit is estimated to be Rs 10,226 crore, which is 0.34% of the GSDP.  In 2020-21, the state has estimated a revenue deficit of Rs 46,178 crore (1.73% of GSDP) at the revised stage.
     
  • Fiscal deficit in 2021-22 is estimated to be Rs 66,641 crore (2.24% of GSDP).  In 2020-21, fiscal deficit is estimated to be 3.29% of GSDP, which is significantly higher than the budget estimate of 1.69% of GSDP.

Policy Highlights

  • Tax proposals: A concession of 1% on the stamp duty has been proposed for properties registered in the name of a woman.  State excise duty on branded country liquor will be increased.  Value added tax on sale of certain liquors will be increased by 5%. 
     
  • Health: Post COVID counselling and treatment centres will be set up in every district hospital and government medical college in urban areas.  New government medical colleges will be established at Sindhudurg, Osmanabad, Nashik, Raigad, and Satara.
     
  • Agriculture and rural development: A scheme to strengthen Agricultural Produce Market Committee will be launched with a capital outlay of Rs 2,000 crore.  Sharad Pawar Gram Samrudhi Yojana will be implemented to provide grants for: (i) construction of permanent cow sheds, goat rearing sheds and poultry sheds, and (ii) composting. Rs 600 crore will be spent over three years towards agricultural research.

Maharashtra’s Economy

  • GSDP: The growth rate of Maharashtra’s GSDP (at constant prices) declined from 6.2% in 2018-19 to 5% in 2019-20.
     
  • Sectors: In 2019-20, the contribution of agriculture, manufacturing, and services sectors in the economy was 14%, 29%, and 57%, respectively.
     
  • Per capita GSDP: The per capita GSDP of Maharashtra in 2019-20 (at constant prices) was Rs 1,73,757 which is 4% higher than the corresponding figure in 2018-19.
     
  • Unemployment: According to the Periodic Labour Force Survey (July 2018-June 2019), the unemployment rate among all age groups in Maharashtra was 5%, which is lower than the all-India level (5.8%).

Figure 1: Growth in GSDP and sectors in Maharashtra 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.

Sources: Economic Survey of Maharashtra 2020-21; PRS.

Budget Estimates for 2021-22

  • Total expenditure in 2021-22 is estimated to be Rs 4,84,091 crore.  This is an annual increase of 13% over the actual expenditure in 2019-20.  This expenditure is proposed to be met through the receipts (other than borrowings) of Rs 3,71,319 crore and borrowings of Rs 1,22,566 crore.   Total receipts for 2021-22 (other than borrowings) are expected to register an annual increase of 14% over 2019-20.  
     
  • For 2021-22, the state has estimated a fiscal deficit of 2.24% of GSDP.  This is lower than 4% limit for fiscal deficit of states allowed by the central government for 2021-22.  Fiscal deficit is estimated to be 3.29% of GSDP in 2020-21 (as per revised estimate), which is higher than the budget estimate (1.69% of GSDP).  In 2021-22, the state estimates to have a revenue deficit of Rs 10,226 crore (0.34% of GSDP), which is an annualised decrease of 23% from the actuals of 2019-20.
     
  • As per the revised estimates for 2020-21, the receipts (other than borrowings) are estimated to be 17% less than the budget estimate, whereas the total expenditure is estimated to be 1% higher than the budgeted estimate.  In 2020-21, as per revised figures, the revenue deficit for Maharashtra is estimated to be 1.73% of GSDP, which is significantly higher than the budget estimate (0.29% of GSDP).

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

 3,78,667 

     4,34,085 

   4,37,391 

1%

     4,84,091 

13%

A.  Receipts (except borrowings)

 2,84,804 

     3,49,766 

    2,91,807 

-17%

     3,71,319 

14%

B.  Borrowings

    57,153 

        81,106 

    1,47,573 

82%

     1,22,566 

46%

Total Receipts (A+B)

 3,41,958 

     4,30,872 

    4,39,380 

2%

     4,93,885 

20%

Revenue Deficit

   17,116 

         9,511 

     46,178 

386%

       10,226 

-23%

As % of GSDP

0.61%

0.29%

1.73%

 

0.34%

 

Fiscal Deficit

    69,236 

        54,618 

       87,697 

61%

        66,641 

-2%

As % of GSDP

2.46%

1.69%

3.29%

 

2.24%

 

Primary Deficit

    35,675 

        19,088 

       50,495 

165%

        23,644 

-19%

As % of GSDP

1.27%

0.59%

1.90%

 

0.79%

 

Note: BE is Budget Estimates; RE is Revised Estimates.

Sources: Maharashtra Budget Documents 2020-22; PRS.

Expenditure in 2021-22

  • Capital expenditure for 2021-22 is proposed to be Rs 1,04,879 crore, which is an annual increase of 16% over 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.  Capital outlay in 2021-22 (Rs 55,613 crore) is estimated to have an annual growth rate of 24% over 2019-20.
     
  • Revenue expenditure for 2021-22 is proposed to be Rs 3,79,213 crore, which is an annual increase of 12% over 2019-20.  This includes expenditure such as payment of salaries, pensions, interest, and subsidies.  In 2020-21, revenue expenditure at Rs 3,35,675 crore is estimated to be 6% less than the budget estimate (Rs 3,56,968 crore).
     
  • In 2020-21, the revenue expenditure is estimated to be Rs 3,35,675 crore against the budget estimate of Rs 3,56,968 crore (a decrease of 6%).

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

   78,361 

       77,117 

1,01,715 

32%

    1,04,879 

16%

of which Capital Outlay

  36,416 

       45,124 

  41,275 

-9%

       55,613 

24%

Revenue Expenditure

3,00,305

    3,56,968 

3,35,675 

-6%

    3,79,213 

12%

Total Expenditure

3,78,667 

    4,34,085 

 4,37,391 

1%

    4,84,091 

13%

A.  Debt Repayment

   24,626 

     29,700 

57,887 

95%

    46,131 

37%

B.  Interest Payments

  33,561 

       35,531 

 37,201 

5%

       42,998 

13%

Debt Servicing (A+B)

58,187

65,231

95,088

46%

89,128

24%

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

Sources: Maharashtra Budget Documents 2021-22; PRS.  

Sectoral expenditure in 2021-22

The sectors listed below account for 62% of the total expenditure on sectors by the state in 2021-22.  A comparison of the expenditure by Maharashtra on the key sectors with that by other states can be found in Annexure 1.  

Table 3: Sector-wise expenditure under Maharashtra 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

   62,573 

     73,048 

    65,706 

    74,830 

9%

  • Rs 24,159 crore has been allocated for assistance to non-government secondary schools and junior colleges.
  • Rs 1,425 crore has been allocated towards Samagra Shikhsha Abhiyan.

Agriculture and Allied Activities

  25,927 

     30,127 

  33,264 

    26,483 

1%

  • Rs 2,370 crore has been allocated towards crop insurance.
  • Rs 784 crore has been allocated towards veterinary services and animal health.

Roads and Bridges

19,122 

     17,397 

 17,032 

    22,608 

9%

  • Rs 4,677 has been allocated towards state highways.

Rural Development

    9,742 

     21,467 

17,561 

    22,194 

51%

  • Rs 4,197 crore has been allocated towards Jawahar Gram Samrudhi Yojana (JGSY), which seeks to create rural employment opportunities by creating infrastructure and community assets.     

Police

16,147 

     20,230 

17,537 

   21,558 

16%

  • Rs 13,967 crore has been allocated for the district police force.

Welfare of SC, ST, OBC, and Minorities

  14,416 

     19,529 

    15,225 

    21,044 

21%

  • Rs 1,837 crore has been allocated towards various scholarships (such as pre and post matric scholarships) for SC, ST, OBC, and other minorities students. 

Health and Family Welfare

14,692 

     17,288 

   19,539 

    19,060 

14%

  • Rs 1,875 crore and Rs 168 crore has been allocated towards the National Rural Health Mission and the National Urban Health Mission, respectively. 

Irrigation and Flood Control

13,172 

     14,905 

12,422 

   17,938 

17%

  • Rs 14,599 crore has been allocated towards major and medium irrigation.

Social Welfare and Nutrition

20,029 

     15,193 

21,049 

    16,378 

-10%

  • Rs 2,435 crore has been allocated towards integrated child development scheme. 
  • Rs 907 crore has been allocated towards welfare of handicapped.

Urban Development

 11,035 

     18,090 

    12,426 

   16,050 

21%

  • Rs 1,765 crore has been allocated towards Smart City Abhiyan.

Energy

   11,302 

     10,055 

    10,165 

   10,588 

-3%

  • Rs 7,400 crore has been allocated towards concession on energy tariffs for certain consumers (such as textile consumers, and industrial consumers). 

% of total expenditure on all sectors

65%

64%

64%

62%

 

 

Sources: Maharashtra 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, Maharashtra is estimated to spend Rs 2,00,423 crore on committed expenditure, which is 54% of its revenue receipts.  On average, states spend 50% of their revenue receipts on committed expenditure.  It comprises spending on salaries (33% of revenue receipts), pension (9% of revenue receipts), and interest payments (12% of revenue receipts).  Committed expenditure is estimated to grow at 11% annually over the actuals in 2019-20.  

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

   1,00,806 

   1,17,473 

 1,05,694 

-10%

 1,22,997 

10%

Pensions

      27,741 

      29,223 

    31,833 

9%

    34,428 

11%

Interest

      33,561 

      35,531 

    37,201 

5%

    42,998 

13%

Total Committed Expenditure

   1,62,108 

   1,82,227 

 1,74,728 

-4%

 2,00,423 

11%

Sources: Maharashtra Budget Documents 2021-22; PRS.

Receipts in 2021-22

  • Total revenue receipts for 2021-22 are estimated to be Rs 3,68,987 crore, an annual increase of 14% over actual revenue receipts in 2019-20.  Of this, Rs 2,70,140 crore (73%) will be raised by the state through its own resources, and Rs 98,847 crore (27%) will come from the Centre.  Resources from the Centre will be in the form of state’s share in central taxes (11% of revenue receipts) and grants (15% of revenue receipts).
     
  • Devolution:  In 2021-22, receipts from the state’s share in central taxes are estimated to be Rs 42,044 crore, an annual increase of 8% over 2019-20.   In 2020-21, devolution at the revised stage is estimated to be 30% less than the budget estimate.  Note that the Union Budget 2021-22 estimates the devolution to states in 2020-21 to be 30% less than the budget estimate.  
     
  • State’s own non-tax revenue:  In 2020-21, the own non-tax revenue of the state is estimated to be 26% less than the budget estimate.  This decrease may be to due to low revenue from social services including urban development (Rs 2,962 crore at revised stage as compared to the budget estimate of Rs 5,667 crore) and economic services including non-ferrous mining and metallurgical industries (Rs 5,313 crore as compared to the budget estimate of Rs 9,195 crore).

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

        1,88,964 

    2,25,071 

        1,84,519 

-18%

    2,43,490 

14%

State's Own Non-Tax

           14,297 

20,506

           15,147 

-26%

       26,650 

37%

Share in Central Taxes

           36,203 

       48,109 

           33,743 

-30%

       42,044 

8%

Grants-in-aid from Centre

           43,725 

       53,770 

           56,088 

4%

       56,803 

14%

Total Revenue Receipts

2,83,190

3,47,457

2,89,498

-17%

    3,68,987 

14%

Borrowings

                 57,153 

       81,106 

        1,47,573 

82%

    1,22,566 

46%

Other receipts

             1,615 

         2,309 

             2,309 

0%

         2,332 

20%

Total Capital Receipts

           58,768 

       83,415 

        1,49,882 

80%

    1,24,898 

46%

Total Receipts

        3,41,958 

    4,30,872 

        4,39,380 

2%

    4,93,885 

20%

Note: BE is Budget Estimates; RE is Revised Estimates.  

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 estimate of 2020-21, Maharashtra is estimated to receive a total of Rs 15,000 crore as GST compensation grants.  The amount of GST compensation loan in 2020-21 is not available in the budget documents.

The state estimates to receive Rs 18,000 crore as GST compensation grants for the year 2021-22.

Sources: Maharashtra Budget Documents 2021-22; PRS.

  • State’s own tax revenue:  Total own tax revenue of Maharashtra is estimated to be Rs 2,43,490 crore in 2021-22, an annual increase of 14% over 2019-20.  The growth rate for own tax revenue is estimated to be significantly higher than the growth rate for GSDP (an annual increase of 3% over 2019-20).  Hence, the own tax to GSDP ratio is estimated to increase from 6.7% in 2019-20 to 8.2% in 2021-22.
  • In 2021-22, SGST is estimated to be the largest source of its own tax revenue (48% of the state’s own tax revenue).  SGST in 2021-22 is estimated to be Rs 1,17,807 crore (an annual increase of 19% over 2019-20).   In 2021-22, Maharashtra is expected to generate Rs 44,000 crore through the collection of Sales Tax and VAT, an annual increase of 8% over the 2019-20. 
     

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

      82,602 

   1,07,146 

     88,000 

-18%

  1,17,807 

19%

31.9%

Sales Tax/ VAT

      37,786 

      40,000 

     34,000 

-15%

     44,000 

8%

11.9%

Stamps Duty and Registration Fees

      28,707 

      30,000 

     22,000 

-27%

     32,000 

6%

8.7%

State Excise

      15,428 

      19,225 

     15,000 

0%

     19,500 

12%

5.3%

Taxes on Vehicles

        8,467 

        9,500 

       6,200 

-35%

     10,000 

9%

2.7%

Land Revenue

        2,155 

        4,000 

       3,000 

-25%

       4,000 

36%

1.1%

Taxes and Duties on Electricity

        9,619 

        9,500 

     11,200 

18%

     10,404 

4%

2.8%

GST Compensation Grants

      15,018 

      10,000 

     15,000 

50%

     18,000 

9%

4.9%

Note: BE is Budget Estimates; RE is Revised Estimates.

Sources: Maharashtra Budget Documents 2021-22; PRS.

Deficits, Debts and FRBM Targets for 2021-22

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

Revenue deficit:  It is the difference of revenue expenditure and revenue receipts.   A revenue deficit implies that the government needs 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 state estimates a revenue deficit of Rs 10,266 crore (or 0.34% of the GSDP) in 2021-22.  The 15th Finance Commission has not allocated revenue deficit grant for the state in 2021-22.

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.     

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).  An 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.  

Fiscal deficit:  It is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government and leads to an increase in total liabilities.  In 2021-22, the fiscal deficit is estimated to be Rs 66,641 crore (2.24% of GSDP).  This is lower than the 3% limit as per the Fiscal Responsibility and Budget Management (FRBM) Act.  As per the revised estimates, in 2020-21, the fiscal deficit of the state is expected to be 3.29% of GSDP, which is significantly higher than the budget estimate of 1.69%.  In both 2020-21 and 2021-22, states have been allowed a higher fiscal deficit than the usual 3% limit under the FRBM Act for undertaking expenditure to support economic recovery.

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 are 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 19, 2021, Maharashtra has not completed any of these four reforms. 

Outstanding liabilities:  Outstanding liabilities is the accumulation of total borrowings (including any liabilities on public accounts) at the end of a financial year.  In 2021-22, the outstanding liabilities is estimated to be 20.64% of the GSDP, which is higher than the revised estimate for 2020-21 (20.22% of GSDP).   The outstanding liabilities for the state is estimated to increase from 15.46% in 2018-19 to 20.5% in 2021-22.

Table 7: Budget targets for deficits for Maharashtra in 2021-22 (% of GSDP)

Year

Revenue Balance

Fiscal Balance

Total Liabilities

2018-19 Actual

0.45%

-0.87%

15.46%

2019-20 Actual

-0.61%

-2.46%

16.01%

2020-21 RE

-1.73%

-3.29%

20.22%

2021-22 BE

-0.34%

-2.24%

20.64%

2022-23 Target

-0.75%

-2.50%

20.50%

2023-24 Target

-0.75%

-2.50%

20.50%

Note: *Budget Estimates; Negative revenue balance indicates revenue deficit; Negative fiscal balance indicates fiscal deficit.

Sources: Maharashtra Budget Documents 2021-22; PRS.

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

image

Note: Revenue Balance data not available for 2022-23 and 2023-24; RE is Revised Estimates; BE is budget estimates.     Negative sign indicates a deficit, positive sign indicates a surplus.

Sources: Maharashtra Budget Documents 2021-22; PRS.  

Figure 3: Outstanding Liabilities targets (% of GSDP)

image

Note: BE is budget estimates.

Sources: Maharashtra Budget Documents 2021-22; PRS.  

Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Maharashtra’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 Maharashtra) as per their budget estimates of 2020-21.[1]

  • Education:  Maharashtra has allocated 17.2% of its total expenditure for education in 2021-22.   This is higher than the average allocation (15.8%) for education by all states (2020-21 BE).
  • Health:  Maharashtra has allocated 4.4% of its total expenditure on health, which is lower than the average allocation for health by states (5.5%).
     
  • Agriculture:  The state has allocated 6.1% of its total expenditure towards agriculture and allied activities.  This is marginally lower than the average allocation for agriculture by states (6.3%).
     
  • Rural development:  Maharashtra has allocated 5.1% of its expenditure on rural development.   This is lower than the average allocation for rural development by states (6.1%).
     
  • Police:  Maharashtra has allocated 5% of its total expenditure on police, which is higher than the average expenditure on police by states (4.3%).
     
  • Roads and bridges:  Maharashtra has allocated 5.2% of its total expenditure on roads and bridges, which is higher than 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 Maharashtra.

Sources: Maharashtra 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, Maharashtra will have a 2.59% share in the divisible pool of central taxes.  This implies that out of every Rs 100 of revenue in the divisible pool during 2021-26, Maharashtra will receive Rs 2.59.

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: % share in divisible pool has been rounded off.  Although the 15th FC 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.
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

Maharashtra

Revenue deficit grants

 2,94,514

0

Local governments grants

 4,36,361

41,391*

Sector-specific grants

 1,29,987

8,431#

Disaster management grants

 1,22,601

17,803

State-specific grants

49,599

2,750

Total

10,33,062

70,375

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 Maharashtra include: (i) Rs 41,391 crore as grants for local bodies, (ii) Rs 17,803 crore as disaster management grants, and (iii) Rs 2,750 crore as state-specific grants.  The state-specific grants are for purposes including: (i) development of Revas Reddy coastal highway, (ii) preservation of cultural heritage, (iii) conservation of forest and wildlife management, and (iv) construction of new housing for police.

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: Overview of Revised Estimates for 2020-21 and Budget Estimates for 2021-22 (in Rs crore)

Particular

2020-21 RE

2021-22 BE

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

Receipts (1+2)

4,39,380

4,93,885

12%

Receipts except Borrowings

2,91,807

3,71,319

27%

1.  Revenue Receipts (a+b+c+d)

2,89,498

3,68,987

27%

a.  Own Tax Revenue

1,84,519

2,43,490

32%

b.  Own Non-Tax Revenue

15,147

26,650

76%

c.  Share in central taxes

33,743

42,044

25%

d.  Grants-in-aid from the Centre

56,088

56,803

1%

Of which GST compensation

15,000

18,000

20%

2.  Capital Receipts

1,49,882

1,24,898

-17%

a.  Borrowings

1,47,573

1,22,566

-17%

Expenditure (3+4)

4,37,391

4,84,091

11%

3.  Revenue Expenditure

3,35,675

3,79,213

13%

4.  Capital Expenditure

1,01,715

1,04,879

3%

i.  Capital Outlay

41,275

55,613

35%

ii.  Debt Repayment

57,887

46,131

-20%

 

Particular

2020-21 RE

2021-22 BE

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

Revenue Balance

-46,178

-10,226

-78%

Revenue Balance (as % of GSDP)

-1.73%

-0.34%

 

Fiscal Deficit

87,697

66,641

-24.0%

Fiscal Deficit (as % of GSDP)

3.29%

2.24%

 

Note: Negative revenue balance indicates revenue deficit.

Sources: Maharashtra Budget Documents 2021-22; PRS.

Table 12: Key components of State’s Own Tax Revenue (in Rs crore)

Tax

2020-21 RE

2021-22 BE

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

SGST

88,000

1,17,807

33.9%

Sales Tax/VAT

34,000

44,000

29.4%

Stamps Duty and Registration Fees

22,000

32,000

45.5%

State Excise Duty

15,000

19,500

30.0%

Taxes on Vehicles

6,200

10,000

61.3%

Land Revenue

3,000

4,000

33.3%

Taxes and Duties on Electricity

11,200

10,404

-7.1%

Sources: Maharashtra Budget Documents 2021-22; PRS. 

Table 13: Allocation towards key sectors (in Rs crore)

Sector

2020-21 RE

2021-22 BE

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

Education, Sports, Arts, and Culture

65,706

74,830

14%

Agriculture and allied activities

33,264

26,483

-20%

Transport

17,734

25,686

45%

of which Roads and Bridges

17,032

22,608

33%

Rural Development

17,561

22,194

26%

Police

17,537

21,558

23%

Welfare of SC, ST, OBC, and Minorities

15,225

21,044

38%

Health and Family Welfare

19,539

19,060

-2%

Irrigation and Flood Control

12,422

17,938

44%

Social Welfare and Nutrition

21,049

16,378

-22%

Urban Development

12,426

16,050

29%

Energy

10,165

10,588

4%

Housing

5,650

6,523

15%

Water Supply and Sanitation

5,497

5,860

7%

Sources: Maharashtra Budget Documents 2021-22; PRS.

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

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.