 "Maharashtra govt's move to cut expenditure by 40% will impact infra, social sectors")
The Bharatiya Janata Party (BJP)-Shiv Sena government in Maharashtra on Monday defended its decision to cut plan expenditure by 40 per cent during the current financial year, as state finances are under tremendous stress.
The government’s move will severely impact infrastructure development and social sectors. The state’s annual Plan for 2014-15 was worth Rs 48,000 crore.
Some of the schemes announced by the erstwhile Congress-NCP (Nationalist Congress Party) government, that would be impacted are: Strengthening of power distribution, road development, improvement in water supply schemes, completion of long pending irrigation projects, up-gradation of health infrastructure and implementation of Sarva Shiksha Abhiyan. The implementation of those schemes will either be deferred till March or will be launched after April or scrapped for ever.
The government said the 40 per cent cut in planned expenditure was also due to the sharp rise in revenue deficit to Rs 26,000 crore as on date from Rs 4,600 crore in March. It clarified there won’t be any cut in the payment of salary and pensions. The government has estimated expenditure of Rs 83,590 crore on salary and pensions for 2014-15.
Revenue Minister Eknath Khadse has squarely blamed his predecessor for the present sorry state of its finances. He told Business Standard: “Expenditure on various schemes will be deferred till March next year and only after review it will be done in next financial year.” He also clarified various schemes and projects announced by the Congress-NCP government ahead of the Assembly elections will be put on hold or scrapped for want of funds. The government will have to mobilise an additional loan of Rs 52,000 crore to implement those schemes.
Khadse said the government will not impose fresh taxes but pay adequate attention to make tax administration efficient. Besides, the government will also take measures to curb leakages in tax collection.
Former member of the Planning Commission, B L Mungekar, attacked the BJP-Sena government’s move and termed it a most retrograde step. “Instead of bringing achche din, the state government would take them to the darkness. A careful scrutiny of the revenue and expenditure relationship should be made and some innovative measures should be thought out by the Maharashtra government. The government can consider innovative ideas to raise revenues and economise on some wasteful and unproductive expenditure,” he said.
A state finance department official argued the government will have to reorient expenditure from revenue to capital, especially when investments are quite low from the government side. “A decision is needed on how much the government can afford as salary growth and expenditure on social sectors, including food security scheme, health insurance and scholarships. Maharashtra needs human capital which has relevance and demand in the growing economy and not that which does not have demand, skill and knowledge to integrate with the economy,” he said.
The official stated the government will have to take a call on subsidies given in various sectors. “Subsidies will have to be transparent, targetted and temporary. They cannot be permanent. At present interest subsidy is given to farmers but the reality is the big farmers are the real beneficiary of it. The government will have to give a relook.”
The government’s move will severely impact infrastructure development and social sectors. The state’s annual Plan for 2014-15 was worth Rs 48,000 crore.
Some of the schemes announced by the erstwhile Congress-NCP (Nationalist Congress Party) government, that would be impacted are: Strengthening of power distribution, road development, improvement in water supply schemes, completion of long pending irrigation projects, up-gradation of health infrastructure and implementation of Sarva Shiksha Abhiyan. The implementation of those schemes will either be deferred till March or will be launched after April or scrapped for ever.
The government said the 40 per cent cut in planned expenditure was also due to the sharp rise in revenue deficit to Rs 26,000 crore as on date from Rs 4,600 crore in March. It clarified there won’t be any cut in the payment of salary and pensions. The government has estimated expenditure of Rs 83,590 crore on salary and pensions for 2014-15.
Revenue Minister Eknath Khadse has squarely blamed his predecessor for the present sorry state of its finances. He told Business Standard: “Expenditure on various schemes will be deferred till March next year and only after review it will be done in next financial year.” He also clarified various schemes and projects announced by the Congress-NCP government ahead of the Assembly elections will be put on hold or scrapped for want of funds. The government will have to mobilise an additional loan of Rs 52,000 crore to implement those schemes.
Khadse said the government will not impose fresh taxes but pay adequate attention to make tax administration efficient. Besides, the government will also take measures to curb leakages in tax collection.
Former member of the Planning Commission, B L Mungekar, attacked the BJP-Sena government’s move and termed it a most retrograde step. “Instead of bringing achche din, the state government would take them to the darkness. A careful scrutiny of the revenue and expenditure relationship should be made and some innovative measures should be thought out by the Maharashtra government. The government can consider innovative ideas to raise revenues and economise on some wasteful and unproductive expenditure,” he said.
A state finance department official argued the government will have to reorient expenditure from revenue to capital, especially when investments are quite low from the government side. “A decision is needed on how much the government can afford as salary growth and expenditure on social sectors, including food security scheme, health insurance and scholarships. Maharashtra needs human capital which has relevance and demand in the growing economy and not that which does not have demand, skill and knowledge to integrate with the economy,” he said.
The official stated the government will have to take a call on subsidies given in various sectors. “Subsidies will have to be transparent, targetted and temporary. They cannot be permanent. At present interest subsidy is given to farmers but the reality is the big farmers are the real beneficiary of it. The government will have to give a relook.”