Burdened with the loan waiver scheme and GST compensation to municipal corporations, the Maharashtra government has asked its departments to submit 'urgent' and 'important' supplementary demands for the forthcoming state budget.
In a circular issued on January 19, the government asked all departments to restrict their demands only to expenses considered as 'urgent' and 'important'.
A supplementary demand means an application for additional funds to carry out a certain work despite there being a provision of money for that work in the annual finance budget. The funds are raised through taxes, bonds or seeking extra loans from banks and financial institutions, an official explained.
The circular categorically mentioned that expenses on loan waiver, compensation to over 25 municipal corporations in the state after the introduction of GST, relaxation in electricity bill payments and irrigation projects were to be done on a priority basis. Hence, it is necessary for the state to control expenses, the circular stated.
Since November 2014, the state government has so far taken total supplementary demands worth Rs 1 lakh crore, said an official from the state finance department.
Last year, the state finance department had issued a resolution imposing a 20% cut on capital expenditure and 30% cut on revenue expenditure.
While the state had, earlier, instructed all departments to implement strict cost-cutting guidelines, it came up with an additional circular on the same issue asking departments not to restrict supplementary demands.
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