State govts face huge revenue shortfall – Uttar Pradesh government has spent over Rs 12,000 crore in paying salaries and pension for April, when its revenues were Rs 2,284 crore.

State govts face huge revenue shortfall – Uttar Pradesh government has spent over Rs 12,000 crore in paying salaries and pension for April, when its revenues were Rs 2,284 crore. 

It’s a similar story in Punjab, where wage and pension bill added up to Rs 3,000 crore in April and there was an equal amount spent on debt servicing, while total earnings were Rs 200-250 crore. Not a single bottle of alcohol was sold and there is virtually no petrol or diesel sales. Punjab earned around Rs 10 crore a day from stamp duty and registration, which is not there, and consumption being what it is, is leading to almost nil GST. But there are higher spending requirements from relief & rehabilitation and medical departments. While states have demanded that their borrowing limit be raised by allowing them to go past the prescribed fiscal deficit of 3% of GDP to up to 5% of GDP, they are awaiting clarity from the Centre to amend their laws.