West Bengal Speech 2021

West Bengal Speech 2021

West Bengal Budget Highlights 2021

• The Gross State Domestic Product (GSDP) of West Bengal for 2020-21 (at current prices) is estimated to be Rs 14,44,174 crore. This is based on a GSDP growth rate of 11.3% expected over the previous year (2019-20).  In 2019-20, GSDP is estimated to grow at a rate of 15% over the previous year.
• Expenditure for 2020-21 is estimated to be Rs 2,55,677 crore, a 3.1% increase over the revised estimate of 2019-20.   The revised expenditure for 2019-20 is Rs 10,137 crore (4.3%) higher than the budgeted estimate.
• Total receipts (excluding borrowings) for 2020-21 are estimated to be Rs 1,79,905 crore, an increase of 9.9% as compared to the revised estimate of 2019-20.  In 2019-20, total receipts (excluding borrowings) are estimated to fall short of the budgeted estimate by Rs 929 crore (0.6%).
• Fiscal deficit for the year 2020-21 is targeted at Rs 31,483 crore (2.18% of GSDP).  In 2019-20, as per the revised figures, fiscal deficit is estimated to increase by Rs 6,862 crore to 2.63% of GSDP, as compared to the budgeted estimate of 2.1% of GSDP.  The budget estimates a zero revenue deficit in 2020-21.
• Sectors such as Agriculture (66%), Irrigation and Flood Control (39%), and Welfare of SC, ST, OBC, and Minorities (38%) saw the highest increase in allocations.  On the other hand, allocations to sectors such as Transport (21%), Social Welfare and Nutrition (19%), and Police (6%) saw the highest decrease.

Policy Highlights

• Pension scheme for SCs and STs:  Persons belonging to the Scheduled Castes (SCs) and Scheduled Tribes (STs), who are more than 60 years of age and not covered under any pension scheme, will be provided a monthly pension of one thousand rupees.   The new pension scheme is expected to benefit 25 lakh persons.  An amount of Rs 3,000 crore has been allocated for the proposed scheme for 2020-21.
• Karma Sathi Prakalpa:  A new scheme, Karma Sathi Prakalpa, has been proposed to provide assistance to unemployed youth to help them become self-reliant.  Under the scheme, one lakh unemployed youth, for the next three years, will be provided soft loan and subsidy of up to two lakh rupees for taking up any new income generating project.  Rs 500 crore has been allocated for the scheme for 2020-21.
• Free electricity to poor:  A new scheme has been proposed to provide free electricity to poor domestic consumers.  Under the scheme, no electricity charge will be levied on those poor domestic consumers whose quarterly consumption of electricity is up to 75 units (lifeline consumers).  The scheme is expected to benefit 35 lakh poor families.  Rs 200 crore has been allocated for the proposed scheme for 2020-21.

Budget Estimates for 2020-21

• Total expenditure in 2020-21 is targeted at Rs 2,55,677 crore.  This is 3.1% higher than the revised estimate of 2019-20.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 1,79,905 crore (69%) and borrowings of Rs 79,465 crore (31%).  Total receipts (other than borrowings) in 2020-21 is expected to be 9.9% higher than the revised estimate of 2019-20.  Borrowings, on the other hand, are estimated to decrease by 2.6% in 2020-21, as compared to the revised estimate of 2019-20.
• In 2019-20, as per the revised figures, expenditure is estimated to increase by Rs 10,137 crore (4.3%) over the budgeted estimate.  Receipts (other than borrowings) are estimated to be lower than the budgeted estimate by Rs 929 crore (0.6%), whereas borrowings are estimated to be higher by Rs 3,176 crore (4.1%).

Expenditure in 2020-21

Capital expenditure for 2020-21 is proposed to be Rs 76,279 crore, which is a decrease of 3% over the revised estimate of 2019-20.  Capital expenditure includes expenditure affecting the assets and liabilities of the state, such as: (i) capital outlay, i.e. expenditure which leads to creation of assets (such as bridges and hospitals), and (ii) repayment and grant of loans by the state government.

• In 2020-21, capital outlay is estimated to be Rs 31,047 crore, which is 15.5% higher than the revised estimate of 2019-20.  Sectors receiving the highest allocation for capital outlay in 2020-21 include transport (15% of the total capital outlay), urban development (11%), irrigation (11%), and rural development (10%).
• Revenue expenditure for 2020-21 is proposed to be Rs 1,79,398 crore, which is 5.9% higher than the revised estimate of 2019-20.  Examples of revenue expenditure are subsidies, and payment of salaries, pension, and interest.
• Revenue expenditure forms 70% of the total expenditure in 2020-21.   Rest 30% of the total expenditure comprises of capital outlay (12%), and repayment and grant of loans (18%).

Subsidies:   In 2020-21, the subsidies provided by the state are estimated to be Rs 7,082 crore, a 22% decrease over the revised estimate of 2019-20.  However, the revised estimate for 2019-20 increased by 34% to Rs 9,104 crore, from Rs 6,808 crore estimated at the budgeted stage.  Rs 10,016 crore was spent in 2018-19.

Receipts in 2020-21

• The total revenue receipts for 2020-21 are estimated to be Rs 1,79,398 crore, an increase of 9.9% over the revised estimate of 2019-20.  Of this, Rs 75,073 crore (42% of the revenue receipts) will be raised through state’s own resources, and Rs 1,04,325 crore (58% of the revenue receipts) will be in the form of central transfers, i.e. state’s share in central taxes and grants-in-aid from the central government.
• Devolution:  In 2020-21, receipts from the state’s share in central taxes is estimated to increase by 11.1% over the 2019-20 revised estimate.  However, in 2019-20, devolution is estimated to decrease by 5% to Rs 59,261 crore as compared to the budgeted estimate.  This may be due to a 19% cut in the union budget for devolution to states, from Rs 8,09,133 crore at the budgeted stage to Rs 6,56,046 crore at the revised stage.  Annexure 2   outlines the major recommendations of the 15^th Finance Commission for the year 2020-21, particularly the revised share of West Bengal and the other states in central government’s tax revenue.