Fiscal condition of state under DF govt has turned worse: Joshi

The issue of fiscal deterioration of Maharashtra's financial situation has become a moot political issue in the campaign trail of Opposition party leaders.

We spoke to erstwhile Shiv Sena chief minister of Maharashtra and former Lok Sabha speaker Manohar Joshi on the issue. Excerpts:

The Congress accuses your Shiv Sena-Bharatiya Janata Party led government in Maharashtra (1995-1998) for the financial mess in the state. They say you raised short-term loans at high interest rates for projects that are nowhere near completion today and yet the state has had to start repaying the principal and interest dues on these loans. Do you agree?

Certainly not. When I took over the reins of Maharashtra as chief minister, the total outstanding liabilities of the state government was Rs 16,000 crore. During our four-and-a-half year tenure, we added debt of Rs 26,000 crore. The total comes to a mere Rs 36,000 crore.

Today after the Democratic Front (DF) government has completed its tenure, the liability book is pegged at Rs 1 lakh crore. What about the Rs 60,000 crore loans raised by the DF government?

Tell me one particular scheme that they have taken up and completed using the loans they have raised. On the other hand when we raised loans we also completed flyover projects, irrigation schemes and drinking water projects in the state.

It is a fallacy to state that we raised only high-cost debt. The fact is that a small fraction of the debt we raised, while in government, was high cost that attracted a 17 per cent rate of interest.

In the second tranche of loans raised by us, the interest rate was pegged at 12 per cent and the final tranche of loans we raised was at an eight per cent rate of interest. They are trying to fool the people with misinformation.

Is it not true that when you took over there was a revenue surplus situation in Maharashtra? But, when you left there was a huge deficit.

There was an outstanding debt of Rs 16,000 crore when we took over. As far as the revenue surplus is concerned, let me tell you this.

The former Congress-led government was not paying salaries to state government employees. You may exhibit a revenue surplus by not paying wages, but that cannot be sustained. We did not resort to not paying our employees so they now say that we left the state with deficits.

Unfortunately, I cannot recollect all the figures or I would have been able to better articulate on this issue.

What about several ill-considered projects such as the Krishna Valley Development project, Vidarbha irrigation project that continue to bleed the exchequer in large principal and interest payments even before they are completed?

Now you must understand this. We had only a five-year tenure, too short a time to complete irrigation projects of such large scale. What has made matters worse is the DF government's failure to fund the completion of the projects we initiated.

They have raised more than twice the amount in loans we had, but failed to carry forward the work on those irrigation projects.

If we come back to power, we will initiate an enquiry into the misuse of the huge loans raised by the DF government that was misutilised instead of being disbursed for development projects and works.

What will your other priorities be, if you form the government? How will you bring the fiscal state of Maharashtra back on track?

For Mumbai city, as we demonstrated during our tenure, it is not difficult to raise finances nor repaying outstanding debt.

Moreover, look at the national scenario. The Union government has reserves of Rs 10,500 crore that is parked in foreign nations that earns a mere 1.5 per cent interest.

A simple transaction of depositing some component of these funds in Indian financial institutions would result in huge additional revenue windfall for the country. We are confident of bringing Maharashtra's fiscal situation under control if elected to power.

(Joshi had just completed his last leg of the campaigning for the Shiv Sena-BJP candidates. He addressed public gatherings at Kopargaon in Shirdi followed by Srirampur and Sangamner where he wound up his election campaigning. He spoke to Business Standard just before emplaning for Mumbai.)