Shinde meets Chidambaram, seeks fiscal concessions

Maharashtra chief minister Sushilkumar Shinde met Union finance minister P Chidambaram on Thursday.

The various issues discussed in the meeting were "" a rescheduling of the principal and interest component on loans owed by agriculturists in the state for the current fiscal, a larger debt swap scheme to lower interest rate on government of India loans availed by the state and larger infrastructural assistance for Mumbai city from the Centre.

State finance minister Jayant Patil said, "The common minimum programme of the United Progressive Alliance (UPA) government in New Delhi includes plans to scale down interest rate on Union government loans disbursed to states. Shinde is meeting Chidambaram to seek a larger debt swap scheme for Maharashtra. Nearly Rs 3 lakh crore with an average interest rate of 10.5 per cent has been disbursed by the Centre to the states. We feel that a larger debt swap scheme will help reduce the interest component to an average 7 per cent, saving crores of rupees to ease the fiscal situation in most of the states."

He emphasised that the state's fiscal situation has deteriorated in part because of the denial of two tranches of the World Bank funded structural adjustment loan as well as frugal central aid for mitigating the acute drought situation during the last four-and-a-half years of the National Democratic Alliance rule at the Centre.

To ease the woes of agriculturists, Shinde will also be asking for a rescheduling of the principal as well as interest component on loans taken by farmers and which are due for payment this year.

"Another major area where states have expectations from the Union budget relates to major infrastructure projects. We are spending a huge amount of borrowed money on major irrigation projects. These projects would be coming up on major rivers in the state and the benefits would be accruing to other states as well, making these nationally oriented projects. Hence, for such major projects, we feel that the Union government should also have a large equity participation. The Centre should have a minimum of 50 per cent equity stake in such major irrigation, road and other infrastructure projects," Patil said.

Finally, Mumbai which contributes the largest chunk to the Union coffers needs to have Central support according to Patil.

He said, "Mumbai is the largest contributor to the Centre's tax kitty. The budget will hopefully set aside allocations for cities like Mumbai (for infrastructure development) as well as for other growing cities such as Chennai and Kolkata."