Rajasthan Budget Analysis

2021-22

The Chief Minister of Rajasthan, Mr. Ashok Gehlot, presented the Budget for the state for the financial year 2021-22 on February 24, 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 Annexure 3.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of Rajasthan for 2021-22 (at current prices) is projected to be Rs 11,98,348 crore.  This is an annual increase of 10% over 2019-20, and is 25% higher than the revised estimate of GSDP for 2020-21 (Rs 9,57,912 crore).  In 2020-21, as per the revised estimates, GSDP is estimated to contract by 4% over 2019-20.  In comparison, the nominal GDP of India is estimated to contract by 13% in 2020-21 (over 2019-20), and grow by 14.4% in 2021-22 (over 2020-21).
  • Total expenditure for 2021-22 is estimated to be Rs 2,50,747 crore, an 8% annual increase over the actual expenditure for 2019-20.  As per the revised estimates, total expenditure in 2020-21 is estimated to be 10% than the budget estimate. 
  • Total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 1,85,505 crore, an annual increase of 9% over the actual receipts for 2019-20.  In 2020-21, total receipts (excluding borrowings) are estimated to fall short of the budget estimate by Rs 25,796 crore (decrease of 15%). 
  • Revenue deficit for 2021-22 is estimated to be Rs 23,750 crore, which is 1.98% of the GSDP.  In 2020-21, as per the revised figures, revenue deficit is estimated at Rs 41,722 crore (4.36% of GSDP), three times higher than the budget estimate (Rs 12,346 crore,1.09% of GSDP).  Fiscal deficit for 2021-22 is targeted at Rs 47,653 crore (3.98% of GSDP).  As per revised estimate, in 2020-21, fiscal deficit is estimated to be 6.12% of GSDP, higher than the budget estimate of 2.99%.

Policy Highlights

  • Tax proposals: Tax relief will be provided in the form of: (i) reimbursement of SGST on purchase of e-vehicles, (ii) reduction in stamp duty from 6% to 4% for flats up to Rs 50 lakh, (iii) reduction in Mandi fee, Krishak Kalyan fee and brokerage for farmers, and (iv) rebate in stamp duty, motor vehicle, SGST, among others for non-profit institutions under the Social Security Investment Promotion Scheme, 2021.
  • Health: Universal Health Care scheme will be implemented to provide health insurance of five lakh rupees to each family.  A Bill will be introduced to provide healthcare as a right.   25 Nursing colleges will be constructed in addition to the eight that currently exist.  
  • Agriculture: A separate budget for agriculture will be presented from next year onwards.  Chief Minister’s Krishak Sathi Yojana will be implemented, with outlay of Rs 2,000 crore over three years, to provide bio fertilizers, micro nutrients kit, and compost unit (among other items) for farmers.  
  • Industry: (i) A new MSME policy will be released, (ii) a new industrial cluster will be developed at Marwar with investment of Rs 750 crore, and (iii) Greater Bhiwadi Industrial Township will be constructed with investment of Rs 1,000 crore.

Rajasthan’s Economy

  • GSDP:  Rajasthan’s GSDP (at constant prices) is estimated to contract by 6.6% in 2020-21.     India’s GDP is estimated to contract by 7.7% in 2020-21.
  • Sectors:  In 2020-21, agriculture, manufacturing, and services sectors contributed to 29%, 28%, and 42% of the economy.   In 2020-21, only agriculture is estimated to record positive growth.
  • Unemployment:  According to the Periodic Labour Force Survey 2018-19, Rajasthan has an unemployment rate of 5.7%, which is similar to the all-India unemployment rate of 5.8%.

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

 image

Sources: Rajasthan Economic Review 2020-21; PRS.

Budget Estimates for 2021-22

  • Total expenditure in 2021-22 is estimated to be Rs 2,50,747 crore.  This is an annual increase of 8% over 2019-20.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 1,85,505 crore and borrowings of Rs 61,904 crore.  Total receipts for 2021-22 (excluding borrowings) are expected to register an annual increase of 9% over 2019-20.
  • As per the revised estimates for 2020-21, total expenditure is estimated to increase by 10% over the budget estimates.  In 2020-21 (as per revised estimate) receipts (excluding borrowings) are estimated to be 15% less than budget estimate whereas borrowings are estimated to increase by 102%.
  • The state expects a revenue deficit of Rs 23,750 crore in 2021-22 (1.98% of GSDP).  In 2020-21, revenue deficit is estimated to be Rs 41,722 crore (4.36% of GSDP) at the revised stage, significantly higher than the budget estimate of Rs 12,346 crore (1.09% of GSDP).  Fiscal deficit for 2021-22 is estimated to be Rs 47,653 crore (3.98% of GSDP).  In 2020-21, fiscal deficit is estimated to increase to 6.12% of GSDP at the revised stage as compared to 2.99% 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

2,13,491 

2,25,731 

2,48,063 

10%

2,50,747 

8%

A. Receipts (except borrowings)

1,55,804 

1,74,187 

1,48,391 

-15%

1,85,505 

9%

B. Borrowings

46,174 

45,281 

91,262 

102%

61,904 

16%

Total Receipts (A+B)

2,01,978 

2,19,468 

2,39,653 

9%

2,47,409 

11%

Revenue Deficit

36,371 

12,346 

41,722 

238%

23,750 

-19%

As % of GSDP

3.64%

1.09%

4.36%

 

1.98%

 

Fiscal Deficit

37,654 

33,922 

58,608 

73%

47,653 

12%

As % of GSDP

3.77%

2.99%

6.12%

 

3.98%

 

Primary Deficit

14,011 

8,429 

33,177 

294%

19,292 

17%

As % of GSDP

1.40%

0.74%

3.46%

 

1.61%

 

Note: BE is Budget Estimates; RE is Revised Estimates. Receipts except borrowings include Rs 500 crore under the Contingency Fund.

Sources: Rajasthan Budget Documents 2021-22; PRS.

Expenditure in 2021-22

Capital outlay and repayment of debt

Rajasthan’s capital outlay (expenditure towards creation of assets) for 2021-22 is estimated to be Rs 24,216 crore, which is annual increase of 28% over 2019-20.  Capital outlay on health of Rs 1,804 crore in 2021-22 is four times higher than the outlay in 2019-20.  The revised estimate for capital outlay in 2020-21 is Rs 16,799 crore which is 22% lower than the budget estimate.  

As per the revised estimate, repayment of debt was Rs 41,063 crore in 2020-21, 133% higher than the budget estimate.  This resulted in 46% increase in capital expenditure for 2020-21.

  • Capital expenditure for 2021-22 is proposed to be Rs 42,667 crore, which is an annual increase of 7% 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 2,08,080 crore, which is an annual increase of 9% over 2019-20.   This expenditure includes the payment of salaries, pensions, and interest.  In 2021-22, revenue expenditure is estimated to comprise 83% of total expenditure, whereas capital outlay is estimated to be 10% of total expenditure. 

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

37,006 

39,981 

58,361 

46%

42,667 

7%

of which Capital Outlay

14,718 

21,619 

16,799 

-22%

24,216 

28%

Revenue Expenditure

1,76,485 

1,85,750 

1,89,702 

2%

2,08,080 

9%

Total Expenditure

2,13,491 

2,25,731 

2,48,063 

10%

2,50,747 

8%

A. Debt Repayment

20,033 

17,623 

41,063 

133%

17,589 

-6%

B. Interest Payments

23,643 

25,494 

25,431 

0%

28,360 

10%

Debt Servicing (A+B)

43,676

43,117

66,494

54.2%

45,949

3%

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

Sources: Rajasthan Budget Documents 2021-22; PRS. 

Sectoral expenditure in 2021-22

The sectors listed below account for 68% of the total expenditure on sectors by the state in 2021-22.  A comparison of Rajasthan’s expenditure on the key sectors with other states can be found in Annexure 1.  

Table 3: Sector-wise expenditure under Rajasthan 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

34,291

40,018

38,020

44,309

14%

  • Rs 9,821 crore has been allocated to Samagra Shiksha Abhiyan.
  • Rs 1,062 crore has been allocated to Mid-Day Meal Program.

Energy

25,112

18,736

15,065

19,449

-12%

  • Rs 16,237 crore allocated for power tariff subsidy.

Health and Family Welfare

12,144

14,700

13,394

16,269

16%

  • Rs 1,687 crore has been allocated towards National Rural Health Mission.
  • Rs 1,463 crore has been allocated for Public Health Insurance scheme.

Rural Development

12,980

13,329

15,426

15,920

11%

  • Rs 3,700 crore has been allocated for PM Awas Yojana (Grameen).
  • MNREGA has been allocated Rs 2,539 crore.

Social Welfare and Nutrition

12,587

11,231

15,044

15,563

11%

  • Chief Minister Samman Old Age pension yojana has been allocated Rs 5,410 crore.
  • Pension scheme for widows has been allocated Rs 2,283 crore.

Agriculture and allied activities

10,523

11,441

13,534

11,810

6%

  • Rs 3,200 crore has been allocated for agriculture loan waiver scheme.
  • Rs 1,500 crore has been allocated for PM Fasal Bima Yojana and weather-based crop insurance scheme.  

Water Supply and Sanitation

6,593

8,794

7,620

10,024

23%

  • Rs 5,182 crore has been allocated for rural water supply program. 
  • Rs 2,479 crore has been allocated for urban water supply program.

Urban Development

4,970

7,272

9,391

8,674

32%

  • Rs 932 crore has been allocated towards SMART City Mission.

Roads and Bridges

5,304

6,653

4,749

7,787

21%

  • Rs 1,400 crore has been allocated for Pradhan Mantri Gram Sadak Yojana.

Police

6,274

7,005

6,683

7,384

8%

  • Rs 5,052 crore has been allocated for district police. 

% of total expenditure on all sectors

68%

68%

67%

68%

 

 

Sources: Rajasthan 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, Rajasthan is estimated to spend Rs 1,14,126 crore on committed expenditure, an annual increase of 10% over 2019-20.  This is 62% of the state’s estimated revenue receipts for 2021-22.  This comprises spending on salaries (33% of revenue receipts), pension (14%), and interest payments (15%).  States, on average, spend 50% of their revenue receipts on committed expenditure items (as per 2020-21 budget estimates).

In 2020-21, committed expenditure reduced marginally by 3% from the budget to the 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

49,066 

55,938 

53,618 

-4%

60,293 

11%

Pensions

20,761 

23,404 

22,989 

-2%

25,473 

11%

Interest

23,643 

25,494 

25,431 

0%

28,360 

10%

Committed Expenditure

93,470 

1,04,836 

1,02,038 

-3%

1,14,126 

10%

Sources: Rajasthan Budget Documents 2021-22; PRS.

Receipts in 2021-22

  • Total revenue receipts for 2021-22 are estimated to be Rs 1,84,330 crore, an annual increase of 15% over 2019-20.  Of this, Rs 1,07,748 crore (58%) will be raised by the state through its own resources, and Rs 76,582 crore (42%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (22% of revenue receipts) and grants (20% of revenue receipts).
  • Devolution:  In 2021-22, receipts from the state’s share in central taxes are estimated to register an annual increase of 5% over 2019-20.   However, as per the revised estimates for 2020-21, receipts from the state’s share in central taxes are estimated to decrease by 30% as compared to the budget stage.  This may be 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:  Rajasthan’s own tax revenue is estimated to be Rs 90,050 crore in 2021-22, an annual increase of 23% over the actual tax revenue in 2019-20.  This is higher than the growth rate for GSDP (10%).  Own tax to GSDP ratio is estimated to increase from 5.9% in 2019-20 to 7.5% in 2020-21.  

Table 5: Break up of state government receipts 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)

State's Own Tax

59,245 

77,030 

68,885 

-11%

90,050 

23%

State's Own Non-Tax

15,714 

19,596 

15,724 

-20%

17,698 

6%

Share in Central Taxes

36,049 

46,886 

32,885 

-30%

40,107 

5%

Grants-in-aid from Centre

29,106 

29,893 

30,486 

2%

36,475 

12%

Revenue Receipts

1,40,114

1,73,405

1,47,980

-15%

1,84,330 

15%

Borrowings

46,174 

45,281 

91,262 

102%

61,904 

16%

Other receipts

15,690 

782 

411 

-47%

1,175 

-73%

Capital Receipts

61,864 

46,063 

91,673 

99%

63,079 

1%

Total Receipts

2,01,978 

2,19,468 

2,39,653 

9%

2,47,409 

11%

NoteCapital Receipts excludes receipts under public account. Capital receipts (2021-22) include Rs 500 crore under the Contingency Fund.   Sources: Rajasthan Budget Documents 2021-22; PRS.

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, Rajasthan is estimated to receive a total GST compensation (grant + loan) of Rs 9,404 crore which is 112% higher than the compensation received in 2019-20 (Rs 4,440 crore).  In 2021-22 the state expects to receive GST Compensation loan of Rs 7,204 crore, and there is no estimate for GST Compensation grants.

 

  • In 2021-22, SGST is estimated to be Rs 37,663 crore, which is the largest source (42%) of the state’s own tax revenue.  This is an annual increase of 31% over the actual SGST revenue in 2019-20.   In 2020-21, SGST is estimated to be 15% less than the budget estimate.   
  • In 2021-22, collection of Sales tax and VAT is expected to be Rs 22,800 crore, an annual increase of 20% over 2019-20.  In 2020-21, the Sales tax and VAT collection is estimated to be 9% lower than the budget estimates.
  • In 2021-22, Rs 13,250 crore is estimated to be generated through State Excise which is an annual increase of 18% over 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's own tax revenue

59,244 

77,029 

68,885 

-11%

90,049 

23%

49%

State GST (SGST)

21,954 

28,250 

24,000 

-15%

37,663 

31%

20%

State Excise

15,843 

21,000 

19,100 

-9%

22,800 

20%

12%

Sales Tax/VAT

9,592 

12,500 

11,500 

-8%

13,250 

18%

7%

Taxes on Vehicles

4,951 

6,000 

5,200 

-13%

6,500 

15%

4%

Stamps Duty and Registration Fees

4,235 

5,600 

5,550 

-1%

6,100 

20%

3%

Taxes and Duties on Electricity

2,263 

2,850 

2,800 

-2%

2,900 

13%

2%

GST Compensation Grants

4,440 

4,800 

4,800 

0%

-   

-100%

-

GST Compensation Loan

-

-

4,604

-

7,204

-

-

Sources: Rajasthan Budget Documents 2021-22; PRS.

Deficits, Debts and FRBM Targets for 2021-22

The Rajasthan 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.   

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 enable Rajasthan to bring down its total liabilities from 41.1% of GSDP in 2020-21 to 38.2% 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 deficit:  It is the excess of revenue expenditure over revenue receipts.   A revenue deficit implies that the government needs to borrow to finance revenue expenditure (which do not increase its assets or reduces its liabilities).  In 2021-22, Rajasthan is estimated to record a revenue deficit of Rs 23,750 crore (1.98% of the GSDP).  For Rajasthan, the 15th Finance Commission has recommended revenue deficit grants of Rs 9,878 crore for 2021-22, Rs 4,862 crore for 2022-23, and zero revenue deficit grant thereafter.  

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 47,653 crore (3.98% of GSDP).  As per the revised estimates, in 2020-21, the fiscal deficit of the state is expected to be 6.12% of GSDP, which is higher than the budget estimate of 2.99%.  

Enhanced borrowing limit in 2020-21: The FRBM Act provides for fiscal deficit limit of 3% of GSDP.  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 were 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, 2021, Rajasthan is eligible to borrow Rs 8,739 crore for fully implementing the first three reforms, and partially implementing the fourth reform. 

Outstanding liability is the accumulation of total borrowings at the end of a financial year.  In 2021-22, the outstanding liability is expected to be 38.2% of the GSDP.  As per the revised estimate for 2020-21, outstanding liability is estimated to be 42.7% of GSDP, which is substantially higher than the 35.3% recorded in 2019-20.

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

Year

Revenue Balance

Fiscal Balance

Outstanding Liability

2018-19 (Actuals)

-3.1%

-3.7%

33.0%

2019-20 (Actuals)

-3.6%

-3.8%

35.3%

2020-21 (Revised)

-4.4%

-6.1%

42.7%

2021-22 (Budget)

-2.0%

-4.0%

38.2%

2022-23

 

-3.5%

37.9%

2023-24

 

-2.99%

37.1%

Note: Outstanding liability includes outstanding debt under Internal Debt, Loans and Advances from Centre, Small Savings, Provident Fund, and Insurance and Pension Fund, and Reserve Fund.   Negative value indicates deficit.

Sources: Rajasthan 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.

Sources: Rajasthan Budget Documents 2021-22; PRS.  

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

image

Note: RE is Revised Estimates; BE is budget estimates.

Sources: Rajasthan Budget Documents 2021-22; PRS.  

 

 

Annexure 1:  Comparison of states’ expenditure on key sectors

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

  • Education:  Rajasthan has allocated 19.1% 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:  Rajasthan has allocated 7% of its total expenditure on health, which is higher than the average allocation for health by states (5.5%).
  • Agriculture:  The state has allocated 5.1% of its total expenditure towards agriculture and allied activities.  This is lower than the average allocation for agriculture by states (6.3%).
  • Rural development:  Rajasthan has allocated 5.4% of its expenditure on rural development.   This is lower than the average allocation for rural development by states (6.1%).
  • Energy:  Rajasthan has allocated 8.4% of its total expenditure on energy, which is double the average expenditure on energy by states (4.2%).
  • Roads and bridges:  Rajasthan has allocated 3.4% of its total expenditure on roads and bridges, which is less than the average allocation by states (4.3%).

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

Sources: Rajasthan Budget 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, Rajasthan will have a 2.47% 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, Rajasthan will receive Rs 2.47.  This is higher than the share in the divisible pool of Rs 2.31 recommended by the 14th FC.

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 of Rs 70,051 crore for healthcare infrastructure to local bodies.  

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

Grants

Total

Rajasthan

Revenue deficit grants

2,94,514

14,740

Local governments grants

4,36,361

27,172*

Sector-specific grants

1,29,987

6,954#

Disaster management grants

1,22,601

8,186

State-specific grants

49,599

2,322

Total

10,33,062

59,374

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 Rajasthan include: (i) Rs 27,172 crore grants for local bodies, (ii) Rs 14,740 crore as revenue deficit grants for 2021-22 and 2022-23, and (iii) Rs 2,322 crore as state-specific grants.

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)

2,39,652 

2,47,409 

3%

Receipts except Borrowings

1,48,390 

1,85,505 

25%

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

1,47,980 

1,84,330 

25%

a. Own Tax Revenue

68,885 

90,050 

31%

b. Own Non-Tax Revenue

15,724 

17,698 

13%

c. Share in central taxes

32,885 

40,107 

22%

d. Grants-in-aid from the Centre

30,486 

36,475 

20%

Of which GST compensation

4,800 

-   

-

2. Capital Receipts

91,672 

63,079 

-31%

a. Borrowings

91,262 

61,904 

-32%

Of which GST compensation loan

4,604   

7,204 

56%

Expenditure (3+4)

2,48,063 

2,50,747 

1%

3. Revenue Expenditure

1,89,702 

2,08,080 

10%

4. Capital Expenditure

58,361 

42,667 

-27%

i. Capital Outlay

16,799 

24,216 

44%

ii. Debt Repayment

41,063 

17,589 

-57%

Revenue Deficit

41,722 

23,750 

-43%

Revenue Deficit (as % of GSDP)

4.36%

1.98%

0%

Fiscal Deficit

58,608 

47,653 

-19%

Fiscal Deficit (as % of GSDP)

6.12%

3.98%

0%

Sources: Union Budget Documents 2021-22; PRS.

 

Table 12Key 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

24,000 

37,663 

57%

Sales Tax/VAT

19,100 

22,800 

19%

State Excise Duty

11,500 

13,250 

15%

Taxes on Vehicles

5,200 

6,500 

25%

Stamps Duty and Registration Fees

5,550 

6,100 

10%

Taxes and Duties on Electricity

2,800 

2,900 

4%

Land Revenue

409 

525 

28%

Sources: Union Budget Documents 2021-22; PRS.

Table 13Allocation 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

38,020

44,309

17%

Energy

15,065

19,449

29%

Health and Family Welfare

13,394

16,269

21%

Rural Development

15,426

15,920

3%

Social Welfare and Nutrition

15,044

15,563

3%

Agriculture and allied activities

13,534

11,810

-13%

Water Supply and Sanitation

7,620

10,024

32%

Urban Development

9,391

8,674

-8%

Roads and Bridges

4,749

7,787

64%

Police

6,683

7,384

10%

Sources: Union 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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