Revenue expenditure shows positive growth  11/22/2020 12:21:42 

Despite fall in own tax and non-tax revenue, a positive growth has been registered in the revenue expenditure across all the southern States during the COVID-19.

But, only Kerala and Andhra Pradesh have registered a positive growth in the capital expenditure. The composition of the State government expenditure changed during the period with substantial increase in the share of social sector. The highest increase in subsidy expenditure of 67% was also registered in the State.

More than 100% hike in revenue and fiscal deficits in all the southern States, except Tamil Nadu (fiscal deficit of 89%), and the corresponding swell in borrowing are the common features of all States during the pandemic period.

A comparative analysis of the State finances of southern States post-COVID-19 done by Anitha Kumary L. and Parma Chakravartti of the Gulati Institute of Finance and Taxation (GIFT) has found that the fiscal performance of the State is better when compared to States such as Karnataka, Andhra Pradesh and Telangana during the first quarter of 2020.

Keralas finances during April-August 2020 show a remarkable increase in subsidy expenditure (259%) which is a clear indication of the intervention to contain the pandemic by providing necessary social security programs.

The total expenditure, which comprises revenue and capital expenditure, shows an increase in quarter one of 2020 vis--vis quarter one in 2019 in Andhra Pradesh, Kerala and Telangana with no change in Tamil Nadu and Karnataka. The highest growth is observed in Andhra Pradesh (118%) followed by Telangana (33%).

In revenue expenditure, the highest growth is in Andhra Pradesh (113%) followed by Telangana (45%), Kerala (16%), Karnataka (6%) and Tamil Nadu (2%). In capital expenditure, the maximum growth is observed in Andhra Pradesh (160%) followed by Kerala(22%).

Keralas actual capital expenditure growth could be even more if the extra budgetary expenditure incurred through Kerala Infrastructure Investment Fund Board (KIIFB) is taken into account.

The fiscal measures to handle the pandemic adopted by Kerala appears remarkable as is evident from the components of revenue expenditure and its sector-wise pattern. During quarter one of 2019, the share of social sector expenditure was the lowest in Kerala (30.5%) and highest in Andhra Pradesh (59.5%), whereas the share of general sector expenditure was the highest in Kerala (53.9%) and lowest in Andhra Pradesh (17.8%).

One of the key features of expenditure observed in Kerala is the fall in share of general sector expenditure from 53.9% to 40.5%. This is an indication of strong response in addressing the pandemic.

The revenue receipts, which comprises States own tax revenue, non-tax revenue, share in Central taxes and grants-in-aid, show a negative growth in all the States, except Andhra Pradesh (35%).

The shock of the lockdown is still reflected in the own tax revenue collection. The negative growth in the own tax revenue collection has resulted in huge growth in the borrowings in quarter one of 2020 compared to the same period in 2019 with a highest borrowing of 478% in Karnataka, Andhra Pradesh (256%), 180% in Telangana, 113% in Kerala and 89% in Tamil Nadu. The comparative analysis of the deficit indicators suggests that revenue deficit increased by more than 100% in all States.

Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism

Dear subscriber,

Thank you!

Your support for our journalism is invaluable. Its a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.

The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.

We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.

Suresh Nambath

« Go back