Deshmukh not to roll back Shinde sops

Maharashtra's liability book, pegged at close to Rs one lakh crore, is set to shoot through the ceiling after chief minister Vilasrao Deshmukh in his first stock taking meeting with senior bureaucrats held today categorically ruled out a roll back on any of the unbudgeted pre-poll sops announced by the previous government.

More than 50 of the 77 pre-election sops announced by the Sushilkumar Shinde-led Democratic Front (DF) government in Maharashtra were not budgeted for, including the Rs 1,200 crore needed to provide free power to the 23 lakh farmers in the state for the last three quarters of the current fiscal year (2004-2005).

Even as the state finance department declined to release funds to compensate the Maharashtra State Electricity Board (MSEB) on this account, the state government directed it to release Rs 585 crore, that included Rs 395 crore compensation for power for the second quarter of this fiscal, Rs 150 crore towards the Mulla Pravara project and Rs 40 crore for initiating reforms in the power sector. Rs 395 crore was released from the budgetary provision made for offering subsidized power to farmers in the state.

This done, MSEB issued zero power bills before the assembly elections were conducted on October 13. However, the state government will have to now make a budgetary provisions for the pre-poll sops it announced.

Deshmukh, when asked whether the budgetary provisions would be made in the three-day special session of the state legislature that begins on Thursday, said, "The special session would be too short a time for making the budgetary provisions which would be accommodated in the winter session of the state legislature that will be held in Nagpur from December 6."

This will prove to be a daunting task as nearly Rs 3,000 crore has to be provided for, even as the previous budget exhibited a Rs 14,000 crore revenue deficit.

Following the stock taking meet held today, Deshmukh while rejecting the option of rolling back the proposed pre-poll sops, has sought to set up a three-member committee of experts to suggest means for additional resource mobilisation.

Deshmukh, today, also directed the MSEB to come out with a proposal to segregate domestic consumers in villages from the pump sets used on the agricultural fields. This is expected to cost Rs 500 crore.

"Deshmukh has directed that once this segregation is achieved (likely in three months) the residential users in villagers could be supplied electricity using a single phase meter reducing the frequent loadshedding woes of households in rural Maharashtra," according to a senior government official.

Deshmukh has also ordered the finance department to resume procurement of cotton under the Cotton Monopoly Procurement Scheme in the state. This will cost the state Rs 1,500 crore in the wake of a bumper crop in the state this year.

A release issued here today by the state government notes, "Considering the bumper crop of cotton this year, farmers, especially in the Vidarbha region, are being offered relatively low margins for their produce by private purchasers. Considering this, the chief minister has directed that the Cotton Marketing Federation to procure cotton from farmers from November 8."

Deshmukh also said that in his informal meeting with Prime Minister Manmohan Singh on Tuesday, he was assured of central assistance to Maharashtra for swapping its high cost Union debt with borrowings that attract a lower rate of interest.