The state faces a strained financial situation from the start of the current fiscal year, thanks to the nighttime curfew and subsequent lockdown to contain the spread of the coronavirus pandemic (COVID-19).
Although the year started on an optimistic note, with major revenue-generating departments such as excise and registration services and stamps showing signs of a strong recovery, the imposition of restrictions took a toll on revenues. The Registration and Stamps Department, for example, reported earnings of ₹ 717 crore in April compared to its previous lows of around ₹ 400 crore per month.
The imposition of the lockdown since May 12 has led to the closure of all activities on the registration front, hitting revenues completely. The imposition of a nighttime curfew since April 20, resulting in the closure of shops, establishments, hotels and other businesses before 8 p.m., hit income and this was followed by the May 12 lockdown, which will continue until May 30.
“The situation is obviously tense due to the lack of economic activity due to the pandemic. There is a 25% drop in e-transport bills and the overall economy is at risk of being hit between 20% and 25%, ”a senior official said. The Hindu. The real impact on the economy will be known once the numbers are reconciled and the finance department pulls the details together.
The tight financial situation in which the state has spent the previous fiscal year is evident from the figures on state finances released by the Reserve Bank of India. According to the RBI bulletin, the state’s investment in treasury bills at auction, seen as a key part of liquidity management, was ₹ 17,414 crore at the end of March 31. 2020-2021 fiscal year.
The state took advantage of ₹ 962 crore through the Special Drawing Facility for 25 days in March and an additional 1,147 crore per overdraft for 18 days. The government has not used Ways and Means Advances for more than five years since the formation of the state due to its double-digit economic growth. But the RBI statement says the state took advantage of the facility for 23 days in March, amounting to 1.556 crore, mainly to maintain the prescribed cash balance.