Maharashtra budget: Rs 10,000 crore deficit, liquor dearer, no other taxes

State taxes on petrol and diesel have not been reduced to arrest their ever-increasing prices. File pic

Presenting the Rs 10,000 crore deficit budget for the year 2021-22 on Monday in the state legislature, Finance Minister Ajit Pawar chose to levy more taxes on liquor to plug revenue losses that have increased because of the COVID-19 pandemic. No other new taxation has been introduced in order to provide relief to the people. The state is estimated to get additional revenue of Rs 800 crore from the hike.

Finance Minister Ajit Pawar chose to levy more taxes on liquor to plug revenue due to the COVID-19 pandemic. File pic

Pawar said country liquor has been classified into two separate categories as branded and non-branded, while increasing state excise duty to 220 per cent of manufacturing cost or Rs 187 per litre, whichever is higher, on branded country liquor.

The value added tax (VAT) on liquor has been increased to 65 per cent from the current 60 per cent. The FM increased the VAT on the sale of liquor as prescribed in the Section 41 (5) of Value Added Tax Act from the existing 35 per cent to 40 per cent. It will gain the state additional revenue of R1,000 crore.

The actual impact on the counter sales prices will be known when the departments concerned intimate the industry and distributors.

However, contrary to public perception and expectations, the FM, who is also the deputy chief minister, did not reduce the state taxes on petrol and diesel to arrest their ever-increasing prices.

To mark International Women's Day, Pawar proposed a concession in stamp duty of 1 per cent over the prevailing rate exclusively to women, provided the transfer of house property or registration of sale deed is in the name of only one woman or more women. The concession will cause a revenue shortfall of around Rs 1,000 crore, he said.

Less revenue expected
In the budget of 2021-22, revenue collection is estimated at Rs 3.68 lakh crore, revenue expenditure is estimated at Rs 3.79 lakh crore, and revenue deficit is pegged at Rs 10,226 crore, said Pawar adding that provision of Rs 58,748 crore was made for infrastructure development. Fiscal deficit is estimated to be Rs 66,641 crore.

The revenue collection was expected to be Rs 3.47 lakh in the budget of 2020-21. But due to a Rs 14,366 crore reduction in the state's share to be received from the Central government this year, a revised target of revenue collection was fixed at Rs 2.89 lakh crore. The budget estimate of total expenditure for the year 2020-21 was Rs 4.4 lakh crore, but it has been revised at Rs 3.79 lakh crore.

Pawar said the slowdown in the economy at both the state and national level was expected to make it difficult to achieve the revised revenue target, but assured that the government will make full efforts to meet the goal.

220
Percentage that duty on branded liquor is hiked to