The Minster of Parliamentary Affairs of West Bengal, Mr. Partha Chatterjee, presented the Budget for the state for the financial year 2021-22 on July 7, 2021 in the absence of the Finance Minister, Dr. Amit Mitra.  Note that due to the 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).  Annexure to this note provides a comparison of the revised estimates for 2020-21 and budget estimates for 2021-22.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of West Bengal for 2021-22 (at current prices) is projected to be Rs 15,10,762 crore.  This is an annual increase of 10% over the actual GSDP of 2019-20.  The GSDP for 2021-22 is estimated to be 11.5% higher than the revised estimate of GSDP for 2020-21 (Rs 13,54,518 crore).  In 2020-21, the GSDP of West Bengal is estimated to grow by 8% over the previous year.
     
  • Total expenditure for 2021-22 is estimated to be Rs 3,08,727 crore, an annual increase of 18% over the actual expenditure in 2019-20.
     
  • Total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 1,86,821 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 33,768 crore (a shortfall of 19%). 
     
  • Revenue deficit for 2021-22 is estimated to be Rs 26,755 crore, which is 1.77% of the GSDP.  In 2020-21, as per the revised estimate, revenue deficit is estimated at Rs 34,345 crore (2.54% of GSDP) as compared to the zero revenue deficit estimated at the budget stage.
     
  • Fiscal deficit for 2021-22 is targeted at Rs 60,864 crore (4.03% of GSDP).  In 2020-21, fiscal deficit is expected to be 3.86% of GSDP as per the revised estimate, higher than the budget estimate of 2.18% of GSDP.

Policy Highlights

  • Tax proposals:  Stamp duty for registration of sale or lease of land, houses, or flats will be reduced by 2% and market value for their registration will reduced by 10%.
     
  • Lakshmir Bhandar:  The scheme will provide for monthly financial support of Rs 1,000 to women from scheduled caste/tribe household and Rs 500 to general category women through direct bank transfer.
     
  • New Krishak Bandhu Scheme:  This scheme, introduced in the current financial year, provides financial support to farmers (Rs 5,000 to Rs 10,000 per acre).  In addition, the scheme provides for a one-time grant of two lakh rupees to the family members of a farmer of 18 to 60 years of age in case of his untimely death.  The scheme has an annual outlay of Rs 3,600 crore.
     
  • Student Credit Card Scheme:  Low interest loans will be provided to students at 4% and there will be a moratorium till one year after the completion of the course of study.

West Bengal’s Economy

  • GSDP:  In 2019-20, West Bengal’s GSDP (at constant prices) is estimated to grow by 7.3% over the previous year.
     
  • Sectors:    In 2019-20, agriculture, manufacturing, and services sectors contributed to 21%, 26%, and 53% of the economy.  In 2019-20, agriculture, manufacturing and services sectors grew by 4.4%, 6.2% and 9.3% respectively.
     
  • Unemployment:  According to the Periodic Labour Force Survey 2018-19, West Bengal has an unemployment rate of 3.9%, which is lower than the unemployment rate of 5.8% at the national level.

Figure 1: Growth in GSDP and sectors in West Bengal 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: MOSPI; PRS.

Budget Estimates for 2021-22

  • Total expenditure in 2021-22 is targeted at Rs 3,08,727 crore.  This is an annual increase of 18% over the actual expenditure in 2019-20.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 1,86,821 crore and borrowings of Rs 1,15,673 crore.  Total receipts in 2021-22 (other than borrowings) are expected to register an annual increase of 14% over the actual receipts in 2019-20.
     
  • As per the revised estimates for 2020-21, total expenditure is estimated to be 3% lower than the budget estimates.  In 2020-21, receipts (other than borrowings) are estimated to be 19% lower than budgeted.
     
  • The state expects a revenue deficit of Rs 26,755 crore in 2021-22 (1.77% of GSDP).  In 2020-21, revenue deficit is estimated to be Rs 34,345 crore at the revised stage, as compared to the revenue neutral state estimated at the budget stage.  Fiscal deficit for 2021-22 is estimated to be Rs 60,864 crore (4.03% of GSDP).  In 2020-21, as per the revised estimates, fiscal deficit is estimated to increase to 3.86% of GSDP as compared to 2.18% 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

 2,20,225 

 2,55,677 

 2,46,814 

-3%

 3,08,727 

18%

A. Receipts (except borrowings)

 1,42,981 

 1,79,905 

 1,46,137 

-19%

 1,86,821 

14%

B. Borrowings

 75,699 

 79,465 

 93,679 

18%

 1,15,673 

24%

Total Receipts (A+B)

 2,18,680 

 2,59,370 

 2,39,815 

-8%

 3,02,494 

18%

Revenue Deficit

 19,661 

 0 

 34,345 

 

 26,755 

17%

As % of GSDP

1.57%

0.00%

2.54%

 

1.77%

 

Fiscal Deficit

 36,831 

 31,483 

 52,350 

66%

 60,864 

29%

As % of GSDP

2.94%

2.18%

3.86%

 

4.03%

 

Primary Deficit

 5,163 

 -1,275 

 18,757 

 

 28,206 

134%

As % of GSDP

0.41%

-0.09%

1.38%

 

1.87%

 

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

Sources: West Bengal Budget Documents 2021-22; PRS.

Expenditure in 2021-22

  • Capital expenditure for 2021-22 is proposed to be Rs 95,291 crore, which is an annual increase of 29% over the actual capital 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.  
     
  • Capital outlay for 2021-22 is estimated to be Rs 32,774 crore, which is an annual increase of 43% over 2019-20.  The revised estimate for capital outlay in 2020-21 is Rs 14,518 crore which is 53% lower than the budget estimate.  This includes a reduction of 2,064 crore in the allocation towards irrigation and flood control, a reduction of Rs 1,863 crore towards social welfare and nutrition, and a reduction of Rs 1,608 crore in the allocation towards urban development.
     
  • Revenue expenditure for 2021-22 is proposed to be Rs 2,13,437 crore, which is an annual increase of 15% over 2019-20.  This expenditure includes the payment of salaries, pensions, interest, and subsidies.  In 2020-21, as per the revised estimates, revenue expenditure is estimated to be 1% higher than the budget estimates.

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

 57,650 

 76,279 

 66,498 

-13%

 95,291 

29%

of which Capital Outlay

 15,971 

 31,047 

 14,518 

-53%

 32,774 

43%

Revenue Expenditure

1,62,575 

 1,79,398 

 1,80,316 

1%

 2,13,437 

15%

Total Expenditure

2,20,225 

 2,55,677 

 2,46,814 

-3%

 3,08,727 

18%

A. Debt Repayment

 40,413 

 44,289 

 48,327 

9%

 61,043 

23%

B. Interest Payments

 31,668 

 32,758 

 33,593 

3%

 32,658 

2%

Debt Servicing (A+B)

72,081

77,047

81,921

6.3%

93,700

14%

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

Sources: West Bengal Budget Documents 2021-22; PRS. 

 

Sectoral expenditure in 2021-22

The sectors listed below account for 69% of the total expenditure on sectors by the state in 2021-22.  A comparison of West Bengal’s expenditure on the key sectors with other states can be found in Annexure 1.  

Table 3: Sector-wise expenditure under West Bengal 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

 32,309 

 37,059 

 36,779 

 43,195 

16%

  • Rs 1,688 crore has been allocated towards Samagra Shiksha Abhiyan.
  • Rs 1,916 crore has been allocated towards Mid-Day Meal Programme.

Social Welfare and Nutrition

 22,686 

 19,744 

 22,098 

 37,868 

29%

  • Rs 1,648 crore has been allocated towards Kanyashree Prakalpa.

Rural Development

 17,096 

 21,371 

 20,794 

 20,053 

8%

  • Rs 2,816 crore has been allocated towards Jawahar Gram Samridhi Yojana.
  • Rs 840 crore has been allocated toward National Rural Employment Guarantee Scheme.

Health and Family Welfare

 10,739 

 11,280 

 12,727 

 16,576 

24%

  • Rs 4,392 crore has been allocated towards Urban Health Services (Allopathy).
  • Rs 2,832 crore has been allocated towards Rural Health Services (Allopathy).

Agriculture and allied activities

 5,154 

 10,648 

 4,871 

 12,936 

58%

  • Rs 5,507 crore has been allocated towards New Krishak Bandhu scheme.

Urban Development

 7,305 

 10,571 

 9,095 

 11,320 

24%

  • Rs 2,755 crore has been provided as assistance to municipal bodies, and Rs 2,354 crore to other urban local bodies for urban development schemes.

Police

 7,391 

 8,167 

 8,737 

 9,503 

13%

  • Rs 5,406 crore has been allocated to district police forces, and Rs 226 crore to special police.

Transport

 6,081 

 6,082 

 5,023 

 6,878 

6%

  • Rs 4,546 crore has been allocated as capital outlay on roads and bridges.

Welfare of SC, ST, OBC, and Minorities

 2,026 

 3,942 

 3,823 

 5,966 

72%

  • Rs 770 crore has been allocated to Taposili Bandhu old age pension scheme for scheduled castes.
  • Rs 323 has been allocated towards Jai Johar old age pension scheme for scheduled tribes.

Irrigation and Flood Control

 2,860 

 4,808 

 2,480 

 5,075 

33%

  • Rs 928 crore has been allocated to West Bengal major irrigation and flood control project.

% of total expenditure on all sectors

64%

64%

65%

69%

 

 

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

Sources: West Bengal 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, West Bengal is estimated to spend Rs 1,13,090 crore on committed expenditure, which is 61% of its revenue receipts.  This is an annual increase of 8% over 2019-20.  This comprises spending on salaries (32% of revenue receipts), pension (11% of revenue receipts), and interest payments (18% of revenue receipts).  In 2020-21, as per the revised estimates, the state is estimated to spend 76% of revenue receipts towards committed expenditure (Rs 1,10,889 crore).  This is 4% higher than the budget estimates.

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

 48,567 

 52,905 

 57,673 

9%

 59,169 

10%

Pensions

 17,462 

 20,844 

 19,623 

-6%

 21,263 

10%

Interest

 31,668 

 32,758 

 33,593 

3%

 32,658 

2%

Total Committed Expenditure

      97,697 

  1,06,507 

  1,10,889 

4%

  1,13,090 

8%

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

Sources: West Bengal Budget Documents 2021-22; PRS.
 

Receipts in 2021-22

  • Total revenue receipts for 2021-22 are estimated to be Rs 1,86,681 crore, an annual increase of 14% over 2019-20.  Of this, Rs 80,028 crore (43%) will be raised by the state through its own resources, and Rs 1,06,653 crore (57%) will come from the centre.  Resources from the centre will be in the form of the state’s share in central taxes (27% of revenue receipts) and grants (30% 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 2% over actual devolution in 2019-20.  As per the revised estimates, devolution to West Bengal in 2020-21 is estimated to be 32% lower than the budget estimate.  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:  Total own tax revenue of the state in 2021-22 is estimated to be Rs 75,416 crore, an annual increase of 11% over 2019-20.  In 2020-21, as per the revised estimates, the state’s own tax revenue is estimated to be 15% lower than the budget estimates.  In 2021-22, the state’s own tax to GSDP ratio is targeted at 5% which is higher than the revised estimate of 4.4% in 2020-21.  This implies that growth in the state’s own tax revenue is estimated to be higher than 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

 60,669 

 70,807 

 59,887 

-15%

 75,416 

11%

State's Own Non-Tax

 3,213 

 4,266 

 2,466 

-42%

 4,612 

20%

Share in Central Taxes

 48,048 

 65,835 

 44,737 

-32%

 50,070 

2%

Grants-in-aid from Centre

 30,984 

 38,490 

 38,881 

1%

 56,583 

35%

Total Revenue Receipts

1,42,914

1,79,398

1,45,971

-19%

 1,86,681 

14%

Borrowings

 75,699 

 79,465 

 93,679 

18%

 1,15,673 

24%

Other receipts

 67 

 507 

 166 

-67%

 139 

45%

Total Capital Receipts

 75,765 

 79,972 

 93,844 

17%

 1,15,812 

24%

Total Receipts

 2,18,680 

 2,59,370 

 2,39,815 

-8%

 3,02,494 

18%

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).

The state has estimated to receive Rs 4,708 crore as GST compensation grant and Rs 6,426 crore as GST compensation loans in 2021-22..

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

Sources: West Bengal Budget Documents 2021-22; PRS.

  • In 2021-22, State GST (SGST) is estimated to be Rs 32,982 crore, the largest source of the state’s own tax revenue (44%).  It is estimated to increase at an annual rate of 10% over 2019-20.  In 2020-21, SGST is estimated to be 25% less than the budget estimate. 
     
  • In 2021-22, the state is expected to generate Rs 16,100 crore through State Excise duty, an annual increase of 20% over 2019-20.  
     
  • In 2021-22, the state expects to generate Rs 8,600 crore through sales tax/VAT.  In 2020-21, the sales tax/VAT collection is estimated to be 9% higher than the budget estimate.  

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

 27,308 

 33,153 

 25,014 

-25%

 32,982 

10%

18%

State Excise

 11,232 

 12,732 

 11,458 

-10%

 16,100 

20%

9%

Sales Tax/ VAT

 7,161 

 7,538 

 8,200 

9%

 8,600 

10%

5%

Stamps Duty and Registration Fees

 6,026 

 6,872 

 6,200 

-10%

 7,246 

10%

4%

Land Revenue

 2,728 

 3,139 

 2,782 

-11%

 3,200 

8%

2%

Taxes and Duties on Electricity

 2,421 

 2,994 

 2,694 

-10%

 2,964 

11%

2%

Taxes on Vehicles

 2,601 

 2,826 

 2,260 

-20%

 2,900 

6%

2%

GST Compensation Grants

 4,359 

 4,928 

 5,798 

18%

 4,708 

4%

-

GST Compensation Loans

-

-

 4,431 

-

6,425

-

-

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

Sources: West Bengal Budget Documents 2021-22; PRS.

Deficits, Debt, and FRBM Targets for 2021-22

The West Bengal Fiscal Responsibility and Budget Management (FRBM) Act, 2010 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 lead to a decrease in total liabilities of West Bengal from 42.9% of GSDP in 2020-21 to 41.2% 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 its expenses which do not increase its assets or reduces its liabilities.  A revenue deficit indicates that the revenue receipts of the state are not sufficient to meet the revenue expenditure requirements.  The budget estimates a revenue deficit of Rs 26,755 crore (or 1.77% of the GSDP) in 2021-22.  In 2020-21, as per the revised estimates, revenue deficit is estimated at Rs 34,345 crore (2.54% of GSDP) against an estimate of zero revenue deficit estimated at the budget stage.  For West Bengal, the 15th Finance Commission has recommended post-devolution revenue deficit grants of Rs 5,013 crore in 2020-21 and Rs 40,115 crore for the period between 2021-22 and 2024-25.

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 60,864 crore (4.03% of GSDP).  As per the revised estimates, in 2020-21, the fiscal deficit of the state is estimated to be 3.86% of GSDP, which is higher than the budget estimate of 2.18%.  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.  West Bengal’s fiscal deficit for 2020-21 is expected to be 3.86%, which is lower than the increased limit.  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 17, 2021, the state has not implemented any of these reforms.

Outstanding liability:  Outstanding liabilities refers to the accumulation of total borrowings at the end of a financial year.  In 2021-22, the outstanding liabilities are estimated to be 35.5% of the GSDP, same as the revised estimate for 2020-21.  The outstanding liabilities are estimated to decrease from 36.1% in 2019-20 to 35.5% in 2021-22.

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

Year

Revenue Deficit

Fiscal Deficit

Outstanding Liability

2018-19

1.0%

3.1%

36.1%

2019-20

1.6%

2.9%

34.6%

2020-21 (Revised)

2.5%

3.9%

35.5%

2021-22 (Budgeted)

1.8%

4.0%

35.5%

Note: Outstanding liabilities includes outstanding debt under Internal Debt, Loans and Advances from Centre, Small Savings, Provident Fund, and Deposit and Reserve Funds.

Sources: West Bengal Budget Documents 2021-22; PRS.

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

image

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

Sources: West Bengal Budget Documents 2021-22; PRS.  

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

image

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

Sources: West Bengal Budget Documents 2021-22; PRS.  

 Annexure 1:  Comparison of states’ expenditure on key sectors

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

  • Education:  West Bengal has allocated 17.5% 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:  West Bengal has allocated 6.7% of its total expenditure on health, which is higher than the average allocation for health by states (5.5%).
     
  • Agriculture:  West Bengal has allocated 5.3% of its total expenditure towards agriculture and allied activities.  This is lower than the average allocation for agriculture by states (6.3%).
     
  • Rural development:  West Bengal has allocated 8.1% of its expenditure on rural development.  This is higher than the average allocation for rural development by states (6.1%).
     
  • Police:  West Bengal has allocated 3.9% of its total expenditure on police, which is lower than the average expenditure on police by states (4.3%).
     
  • Roads and bridges:  West Bengal has allocated 2.2% of its total expenditure on roads and bridges, which is significantly lower 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 West Bengal.

Sources: West Bengal 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, West Bengal will have a 3.08% 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, West Bengal will receive Rs 3.08.  This is same as the share recommended by the 14th FC for the 2015-20 period.

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

West Bengal

Revenue deficit grants

 2,94,514

40,115

Local governments grants

 4,36,361

30,393*

Sector-specific grants

 1,29,987

8,286#

Disaster management grants

 1,22,601

5,587

State-specific grants

49,599

2,100

Total

10,33,062

86,481

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.

State-specific grants recommended for West Bengal include: (i) Rs 1,000 crore for the development of infrastructure in backward districts, (ii) Rs 550 crore for civil works for restraining Ganga erosion, and (iii) Rs 550 crore for drinking water purification projects.

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)

2,39,815

3,02,494

26%

Receipts except Borrowings

1,46,137

1,86,821

28%

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

1,45,971

1,86,681

28%

a. Own Tax Revenue

59,887

75,416

26%

b. Own Non-Tax Revenue

2,466

4,612

87%

c. Share in central taxes

44,737

50,070

12%

d. Grants-in-aid from the Centre

38,881

56,583

46%

Of which GST compensation

5,798

4,708

-19%

2. Capital Receipts

93,844

1,15,812

23%

a. Borrowings

93,679

1,15,673

23%

Of which GST compensation loan

4,431

6,425

45%

Expenditure (3+4)

2,46,814

3,08,727

25%

3. Revenue Expenditure

1,80,316

2,13,437

18%

4. Capital Expenditure

66,498

95,291

43%

i. Capital Outlay

14,518

32,774

126%

ii. Debt Repayment

48,327

61,043

26%

Revenue Deficit

34,345

26,755

-22%

Fiscal Deficit

52,350

60,864

16%

Revenue Deficit (as % of GSDP)

2.54%

1.77%

-

Fiscal Deficit (as % of GSDP)

3.86%

4.03%

-

Sources: West Bengal 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

25,014

32,982

32%

State Excise

11,458

16,100

41%

Sales Tax/ VAT

8,200

8,600

5%

Stamps Duty and Registration Fees

6,200

7,246

17%

Land Revenue

2,782

3,200

15%

Taxes and Duties on Electricity

2,694

2,964

10%

Taxes on Vehicles

2,260

2,900

28%

Sources: West Bengal 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

 36,779 

 43,195 

17%

Social Welfare and Nutrition

 22,098 

37,868

71%

Rural Development

 20,794 

 20,053 

-4%

Health and Family Welfare

 12,727 

 16,576 

30%

Agriculture and allied activities

 4,871 

 12,936 

166%

Urban Development

 9,095 

 11,320 

24%

Police

 8,737 

 9,503 

9%

Transport

 5,023 

 6,878 

37%

Welfare of SC, ST, OBC, and Minorities

 3,823 

 5,966 

56%

Irrigation and Flood Control

 2,478 

 5,075 

105%

Sources: West Bengal 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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