State may slash fiscal plan size by 20%

Maharashtra chief minister Sushilkumar Shinde today said that the fiscal plan size of the state may have to be cut by 10-20 per cent following the government's decision to raise the price of cotton procured under the Cotton Monopoly Procurement Scheme (CMPS) to Rs 2,500 per quintal.

The Cabinet has also decided not to allow departmental stores to sell mild beer.

Briefing mediapersons after the weekly meeting with his Cabinet ministers, Shinde said: "The Cabinet today decided to offer a higher price of Rs 2,500 per quintal for cotton procured under the CMPS as against Rs 1,925 announced earlier. This will cost the state Rs 900 crore. It will also result in a cut in the plan size. Development projects in all sectors would receive a lower fund allocation."

The Cabinet also decided to put on hold the Maharashtra State Electricity Board's (MSEB) decision to disconnect power supply to gram panchayats to recover Rs 135 crore of arrears.

It also decided to stop disconnecting power supply to farmers using agricultural pump sets. This drive was aimed at recovering Rs 3,500 crore of arrears owed by farmers to the MSEB.

Principal secretary (energy) Jayant Kawle said: "However, a precondition is that these two category of consumers pay their current power bills to ensure that there is better compliance in payments. Even those with outstanding arrears have been asked to apply to the MSEB to clear the arrears in installments. This is not a subsidy."

According to a government official, the Cabinet meeting today brought to the fore the feud between the Congress and Nationalist Congress Party members who are the lead partners in the Democratic Front alliance government in Maharashtra.

"Ministers of both these parties sought to outdo each other in terms of the benefits (increased price for cotton) being sought under the CMPS. While the minister for rural development R R Patil sought a price of Rs 2,700 per quintal, several Congress ministers insisted that the price should be pegged at least Rs 2,500 per quintal. A hurried chief minister had to finally concede," the official said.

The Cabinet decided to enact a law that would make it binding on the state government to compulsorily make allocation of development funds for scheduled tribes and adivasis in the state. This would entail a fund allocation of Rs 1,500 crore, the chief minister said.