Maharashtra plans outcome budget

Maharashtra finance minister Jayant Patil has indicated, "The state might go for an outcome budget, on the lines of the one presented by the Union government, from the next fiscal year."

He was speaking to journalists on the state economy's turnaround in the last few years. He said, "This fiscal, we introduced a system of monitoring monthly cash flow and a tight vigil has been kept on expenditure pattern of each ministry. This has helped us figure out whether each ministry is able to spend monthly allocations made to them."

He said, "Next step in this direction would be to establish a correlation between cash expenditure and physical output and we are preparing a paper on outcome budget, and it would be soon presented before the cabinet for approval."

In fact, some ministries have been identified in which the concept of output budget will be implemented, he added.

On the financial turnaround made by the state, Patil said, "Because of the constant efforts made over the last few years, we have managed to curtail expenditure and increase revenues. Due to these efforts, all indicators such as revenue deficit, fiscal deficit, loan and interest burden, state gross domestic product (SGDP) are showing positive signs."

For the first time in 13 years, the state managed to present a revenue surplus budget of Rs 226 crore, percentage of debt to SGDP has been brought down from a high of 30 per cent to 25 per cent, fiscal deficit is down from five per cent to around two per cent of SGDP, he said.

The state has also managed to bring down the average rate of interest on loans from around 12.70 per cent to 9.33 per cent by participating in debt swap schemes and this has reduced the state's interest burden by Rs 3,000 crore, he said.

Another reason for reduced debt and interest burden has been that the state avoided the temptation of supporting plan expenditure from non-plan loans (market borrowings), he added.