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The biggest challenge to the new BJP government – if that scenario works out, of course – will be to restore Maharashta's past glory as a favoured investment destination, maintain fiscal prudence especially by containing the revenue and fiscal deficits, increase the pace of agricultural and industrial growth and, most importantly, increase tax collection. For the past two years, the state budget has been revenue deficient due to increased spending on drought relief and subsidies towards power tariff rebate.
Besides, a BJP-led government will have to mobilize a record Rs 85,000 crore to complete pending irrigation projects, over Rs 1 lakh crore for various infrastructure development projects in Mumbai and other urban centres, as well as increase allocation in social sectors including education, public health.
In its poll manifesto, the BJP has promised a transparent, progressive and decisive government. It has also promised to abolish the local body tax (LBT) which has been introduced in phases since 2010 and has been opposed by traders. However, to do this, the new government will have to either go back to the controversial octroi regime or alternate levy, which will not impact already cash-strapped civic bodies.
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Even though Maharashtra continues to attract more than 18% of total investments, including domestic and foreign direct investment, it faces stiff competition from states like Gujarat, Tamil Nadu, Madhya Pradesh, Chhattisgarh, and Orissa. The BJP has promised to remove procedural delays and make the state investment-friendly.
Further, the new government will have to look into the conversion of special economic zone into integrated industrial zone as announced by the Congess-NCP government. Despite Maharashtra getting approval for more than 150 SEZs, the implementation has been dismal due to issues relating to taxes and policy uncertainty. The Congress-NCP government's decision to develop them as integrated industrial area also failed to take off.
The new government will have to either withdraw the previous government's decision or bring in new proposals to expedite industrial development. Besides, the government will have to implement in a time-bound manner revival of over 240 industrial estates managed by the state-run Maharashtra Industrial Development Corporation.
BJP had blamed Congress-NCP government for poor agriculture growth which has been averaging 1.3% and hit 4% only in FY2013-14, and had cited examples of states like Madhya Pradesh, Gujarat, and even Bihar which reported double digit growth in this key sector. ''Higher agricultural growth can be achieved and the BJP government will make it a reality,” state BJP president Devendra Fadnavis had told Business Standard
Moreover, the incoming government will have to focus on making the state free of power cuts. According to the latest data, 85% of Maharahstra doesn’t have any power cuts but the new government will have to focus on 24x7 power to areas with high distribution losses by improving recovery processes. Besides, the government will have to bring down industrial tariffs which may put additional burden on its already-stretched finances.
As promised by Prime Minister Narendra Modi, the government will have to put in place an action plan to make Mumbai a skill development capital and convert it into the global financial capital.
