Bengal’s revenue dips in second Covid wave- state’s revenue generation had been hit hard in May and June

According to sources, the state’s revenue generation had been hit hard in May and June after stricter measures had been announced to curb the virus spread

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Pranesh Sarkar   |   TT  |  Calcutta   |   06.07.21: The second wave of Covid-19 has left the exchequer of the Bengal government stressed as the state’s revenue generation has dipped significantly and officials are worried whether current austerity measures would be enough to tide over the crisis.

“The state’s own revenue generation has come down to Rs 2,700 crore to Rs 2,900 crore a month after the second wave hit the state in April, compared to Rs 5,000 crore to Rs 5,500 crore in the pre-Covid period. As a result, the state government was forced to cut down expenditures in all possible areas,” said a senior government official.

According to sources, the state’s financial condition has been hit further after the Mamata Banerjee government decided to introduce the welfare schemes that the chief minister had promised ahead of the Assembly polls.

The financial assistance for farmers under Krishak Bandhu has already been enhanced and a sum of additional Rs 2,000 crore is being spent.

Soon, Laxmir Jhanpi, a scheme to give monthly assistance of Rs 500 to women belonging to General Castes and Rs 1,000 to SC/ST women, will be launched. This particular scheme is likely to put a further burden of Rs 11,000 crore on the state exchequer.

“The state government would have to allot funds for these schemes in the budget that would be tabled this week. If additional funds are allotted to welfare schemes, the state would have to cut down expenditure on several other schemes,” said another official.

The finance department has already issued an order making it clear that no department will be able to launch schemes worth more than Rs 30 lakh. Only departments like PWD and PHE can initiate projects worth up to Rs 1.5 crore in the ongoing financial year.

The sources said the state’s revenue generation had been hit hard in May and June after stricter measures had been announced to curb Covid’s spread.

“The state was hit hard because the revenue from the GST had come down to less than Rs 500 crore a month when Bengal’s average collection from the GST is around Rs 1,200 crore a month. Similarly, revenue from excise had plummeted to almost nil in May. It marginally improved in June after liquor shops were opened. But it was much less than the Rs 1,000 crore mark a month, which is usually generated in a normal situation,” said another official.

The situation has turned critical, the sources said, as the Centre was not clearing GST dues on time. “We have a backlog of nearly Rs 5,000 crore, which is a huge amount given the current financial condition of the state,” said a source.

The state is also spending more than Rs 400 crore every month in order to provide free treatment to Covid patients and run safe homes.Senior officials said they expected that the situation would change to some extent from August.

“Between November 2020 and February this year, the state’s revenue generation had almost returned to normality. The revenue had crossed Rs 4,500 crore then. But after the second wave had hit, the revenue dipped significantly. It is expected we will cross the Rs 3,000 crore mark in terms of revenue generation from August,” said an official.