The Maharashtra government today proposed a total subsidy allocation of Rs 7,099 crore for providing relief to farmers, power looms and other sections of the society, as it presented in its annual budget for 2011-12.
Of the total subsidy allocation, Rs 2,500 crore has been proposed for nearly 3.1 million agricultural pumps, and Rs 500 crore to subsidise electricity rates for the powerloom industry. The subsidy allocation in the 2010-11 budget was about Rs 5,500 crore.
While presenting the budget, Finance Minister and Deputy Chief Minister Ajit Pawar said subsidy for the powerloom sector in particular would promote it in the state, while subsidy allocation of Rs 2,500 crore to agricultural pumps would help increase farmers’ income.
The state-run MahaVitaran would provide electricity connection to 275,000 agricultural pumps. Further, to remove a backlog of electrification of agricultural pumps, a provision of Rs 80 crore has been proposed.
Chief Minister Prithviraj Chavan said the government could not simply do away with subsidies targeted to deserving sections and sectors.
In order to recover long pending dues of electricity bills from farmers, the finance minister has announced the Krishi Sanjeevani Yojana 2011. This was necessitated as the total amount of outstanding against the electricity bills of farmers was about Rs 5,900 crore at the end of December last year comprising Rs 2,910 crore of principal amount, Rs 2,930 crore of interest and Rs 59 crore of penal interest. “Under the proposed scheme, it has been decided to waive interest and penal interest in respect of those farmers who pay in full outstanding principal amount as of a specified cut off date. Nearly 2.2 million farmers will be benefitted,” the minister said.
Further, the crop loans would be available to farmers at a reduced rate of interest. Farmers, who repay their crop loan within a stipulated period, would get loan up to Rs 50,000 at zero rate of interest and would get loan above Rs 50,000 and up to Rs 3 lakh at a two per cent rate of interest. For the payment of interest subsidy under this scheme, the finance minister has made a provision of Rs 84.28 crore.
The government has allotted Rs 83 crore under the National Crop Insurance Scheme. About 2.6 million farmers are participating in the scheme.
Pawar has made a provision of Rs 6,300 crore for irrigation projects which have the potential for storage. Nearly 150 projects are planned to be completed, creating an irrigation potential of more than 200,000 hectare and water storage of 60,000 million cubic feet.
In order to improve the outage scenario, the government would provide Rs 1,500 crore to the state-run MahaGenco to expedite capacity addition. Besides, it would provide Rs 800 crore to the MahaVitaran to implement distribution infrastructure.
The finance minister also proposed a special scheme for reviving the sick or closed sugar mills in the state. Maharashtra, which is expected to produce 9.1 million tonnes of sugar by the end of the ongoing crushing season, proposes to cover factories with negative net worth and which have not crushed in the previous three crushing seasons in the revival scheme.
As a part of the package, if the entire amount of sales tax and sugarcane purchase tax outstanding from the sugar mill is paid upfront, the government would waive interest and penalty on the same. This is expected to recover tax dues from these sick or closed mills. The scheme, which has been announced for a year, comes to effect from April 1.
Besides highlighting the populist theme of the budget, both Chavan and Pawar said the budget had been prepared by giving emphasis on fiscal discipline.
C S Deshpande, executive director of the Maharashtra Economic Development Council said, “There is some attempt at reducing the revenue deficit, eliminating it by the end of the financial year. This depends on 12 to 15 per cent industrial growth which will generate a commensurate increase in VAT in two years in a row.
Maharashtra has to do something more. We keenly await new industrial and investment policy as announced. However, there is a disappointment in terms of major reform initiatives. The budget has missed an opportunity to announce some proposals in this regard.”
