Prithviraj Chavan-led government in Maharashtra has received a major blow, as the Centre has conveyed its inability to release funds from its kitty for the implementation of recently announced Rs 1,000-crore package to assist farmers affected due to the untimely rainfall.
This was revealed by a senior minister in the Chavan-led cabinet who did not want to be identified.
In view of such a critical stand taken by the Centre, the state government is exploring various options, which include heavy cut in expenditure incurred by different departments and carrying out stringent measures to curb evasion of taxes such as excise duty, motor vehicle tax and stamp duty.
Deputy Chief Minister Ajit Pawar, who is also the finance minister, is holding series of meetings with the department officials to work out an action plan in this regard.
“A cut in the annual plan, which is an extreme step, can be considered if all options fall short of mobilisation of required funds,” the minister said, but hastened to add it was not under consideration at this juncture. The Plan outlay for Maharashtra for 2010-11 was to the tune of Rs 37,916 crore.
The issue is expected to come up for discussion at the state cabinet meeting scheduled for Wednesday.
A senior government official, who did not want to be quoted, told Business Standard, “The government has to shell out necessary money to bail out farmers affected by the untimely and unseasonal rain. Kharif crops on more than one million hectare of land have been damaged. The Rs 1,000-crore package was announced by Chief Minister Prithviraj Chavan and his deputy Ajit Pawar in the recently concluded winter session of the state legislature. The government may have to shell out more as further details are being compiled by the divisional commissioners and district collectors”.
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The official said the government was expecting some assistance from the Centre as to ease the burden. However, the Centre is not in a position to release funds and thus the state government would have to look for new measures to mobilise necessary funds.
The official admitted there has been an increase in sales tax revenue to Rs 20,647 crore in September 2010 compared to Rs 16, 157 crore of the corresponding period last year. “This was almost 28 per cent in actual terms but calculating it based on our target, it comes to 13 per cent. This is mainly due to insistence on filing e-returns on due date, imposition of penalty on non-filers as well as facility of e-payment to all traders whose returns are on monthly or quarterly basis. The government expects to mobilise over Rs 35,000 crore by the end of the current financial year”, he said.
However, the state excise revenues are still lagging as compared to the target envisaged for the period ending September 2010. Excise collection was Rs 2,600 crore against 2,900 crore, which was five per cent below the target. The government will have to step up its efforts to increase excise revenues.