Param IAS

Receipts in 2020-21

Part of: Bihar Budget 2020-21

  • The total revenue receipts for 2020-21 are estimated to be Rs 1,83,924 crore, an increase of 21.5% over the revised estimates of 2019-20.
  • Out of which , Rs 39,989 crore (22%) will be raised by the state through its own resources, and Rs 1,43,935 crore (78%) will come from the centre in the form of grants (28% of revenue receipts) and the state’s share in central taxes (50% of revenue receipts).
  • Bihar's share in the centre’s tax revenue will increase from 4.06% during the 2015-20 period to 4.13% for 2020-21 (an increase of 2%) as per the recommendations of the 15th Finance Commission.
  • Total own tax revenue of Bihar is estimated to be Rs 34,750 crore in 2020-21, an increase of 1.9% over the revised estimates of the previous year.
  • The own tax to GSDP ratio is targeted at 5.1% in 2020-21, which is lower than the revised estimates for 2019-20 (5.5%). This implies that the growth of tax collections is estimated to be slower than the growth of the economy.
  • In 2020-21, State Goods and Services Tax (SGST) is estimated to be the largest source of own tax revenue (60% of total own tax revenue). SGST collection is estimated to increase by 16.8% over the previous year.
  • In 2020-21, Bihar is expected to generate Rs 5,830 crore through the levy of sales tax (on items such as petroleum products), and VAT, a decrease of 18.5% over the revised estimates of 2019-20. Since 2017-18, the contribution of state excise duty to revenue has become zero as the state enforced alcohol prohibition.
  • Rs 4,700 crore is estimated to come from stamp duty and registration fees in 2020-21, a decrease of 6% over the previous year.

Note:

GST Compensation: The GST (Compensation to States) Act, 2017 guarantees states compensation for five years (till 2022) for any revenue
loss arising due to GST implementation.

  • The Act guarantees states a 14% annual growth on their revenue which was subsumed under GST. If the GST revenue of a state does not match the guaranteed growth, compensation grants are provided to meet the shortfall.
  • The state is estimated to receive GST compensation grants in all three years between 2018-19 and 2020-21 (Rs 3,500 crore in 2020-21).
  • Reliance on GST compensation grants indicates a slower growth in SGST collection as compared to the 14% annual growth envisaged under the Act.