Covid-hit treasury, ’22 polls make it tough task for govt

AS OVERALL REVENUE RECOVERY IS BOUND TO REMAIN LOW, THE GOVT IS UNLIKELY TO PRESENT A LARGE SIZE BUDGET FOR 2021-2022.

LUCKNOW : The Uttar Pradesh government has begun preparing the budget for 2021-2022 amid decline in revenue recovery due to the Covid pandemic.

This will be the BJP government’s last budget before the 2022 assembly elections.

“We have begun the process of preparing the annual budget for 2021-2022. Most of the departments have already sent their budgetary proposals. Others will do so in the next few days,” said a senior officer.

The state government has about 90 departments and had asked them to send their proposals, as per guidelines, by November 30. “We have not extended the November 30 deadline. But proposals received in the next few days will be accepted as has been the practice over the years,” said the officer.

As this will be the last budget of the BJP government before the 2022 assembly elections, chief minister Yogi Adityanath may like to make some populist announcements in it.

“The chief minister may like to make some populist announcements. This will add to his challenges as he will not only need more funds to do so, but he will also have to strike a balance between the earnings and expenditure,” said Yashvir Tyagi, former professor, department of economics, Lucknow University.

Besides making populist announcements, the chief minister may also like to allocate funds to complete or take ahead the infrastructure projects. The state government may also like to work on the social welfare sector in addition to its focus on the health sector in view of the ongoing fight against Covid-19.

The question that arises is: Will the state government be able to accommodate the demands made by the departments?

“The state government’s guidelines have already asked departments to restrict their demands and the guidelines will be followed,” said the officer.

Uttar Pradesh’s GSDP has shown a negative growth of about 22.5 per cent in the first quarter of 2020-2021. Although an increase in revenue has been witnessed in the second quarter and in the subsequent two months (October and November 2020), the size of current year’s budget is bound to come down. The state government had presented the annual budget for 2020-2021 of about Rs 5.12 lakh crore. As the overall revenue recovery is bound to remain low, the state government is unlikely to present a large size budget for 2021-2022.

“The revised estimates will bring down the size of current financial year’s budget and it will be difficult to match the size of the budget for 2021-2022,” said Tyagi while hoping the situation on revenue recovery front for 2020-2021 would improve further in the coming months.