Rajasthan defers staff salaries as revenues dry up  

#GS2 #Governance #GS3 #Economy  

With depleting income amid the extended lockdown and mounting healthcare bills, Gehlot urges massive infusion of funds  

  • The revenue collection in Rajasthan in the first month of fiscal 2020-21, after the COVID-19 lockdown was enforced, has fallen by 70%, even as there was a shortfall of ₹18,000 crore in the last fiscal 2019-20.  
  • While the State had budgeted for revenues of ₹8,400 crore, including ₹6,800 crore through taxes and GST compensation and ₹1,600 crore of non-tax revenue, it has achieved only ₹1,800 crore by April-end.  

Massive shortfall  

  • Rajasthan has allocated ₹1,200 crore for the expenses to deal with the impact of COVID-19, including the expenditure for providing free wheat under the public distribution system to the beneficiaries of National Food Security Act.  
  • The biggest decline in tax revenue earnings has been witnessed in stamp duty and registration and vehicle taxes, as there was almost no sale of property and vehicles during the lockdown.   
  • For vehicle tax, the target was ₹500 crore, while the State collected only ₹8 crore.  
  • As the State’s GDP is around ₹11,00,000 crore, the 2% raise will enable the State to borrow about ₹20,000 crore more from the open market.  
  • As part of the measures to deal with the crisis situation amid rapid deterioration of financial condition, the Rajasthan government has partially deferred the salaries of MLAs and its employees, including the all India services officers, in March, while five days’ salary was deducted as contribution to the Chief Minister's Relief Fund for COVID-19.  
  • In the postponement of salary payment, 75% salary of legislators, 50% salary of all India services officers and 30% salary of other government officials has been deferred.  
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