Statesman News Service
Mumbai, 7 February
A state with an accumulated debt of nearly Rs 3 lakh crore and staring at potential bankruptcy has been announcing new development and welfare schemes since 1 January which would add an extra burden of nearly Rs 11,000 crore on its exchequer.
The sops to lure voters ahead of the upcoming Parliament elections may sound politically correct but are financially untenable, warns Finance Minister Ajit Pawar, citing the empty coffers.
“The state treasury is not perennially stacked with ready cash," he reportedly warned his Cabinet colleagues, including Chief Minister Prithviraj Chavan at last Wednesday’s meeting
Not a single proposal approved by the Cabinet at any of its six previous meetings is likely to receive fresh allocation because the state’s budget has no provision for additional expenditure.
The finance ministry, too, has cried halt to these election-eve announcements. In the ministry’s assessment, on account of economic slowdown, the state finances are in the doldrums.
The department is struggling to achieve the revenue target set out in the annual budget for 2013-14. Key departments like sales tax and state excise (covers liquor consumption) that are main sources of finance have already cautioned the state about possible shortfall of 10 to 15 per cent in revenue earning. These two top revenue earners fetch nearly Rs 80,000 crore for the state exchequer that has been striving to meet the total revenue collection of about Rs 1.90 lakh crore.
Notwithstanding the finance ministry’s advisory to cut planned and unplanned expenditure by 20 and 10 per cent, respectively, the Congress and Nationalist Congress Party (NCP) leaders are merrily announcing new projects and schemes for their constituencies to keep voters in good humour. Ironically, Mr Pawar who has been under attack for splurging over Rs 70,000 crore on incomplete irrigation projects for the past 10 years has suddenly started giving lessons in austerity to his Cabinet colleagues.
Since the start of 2014, the Maharashtra government has announced 15 to 20
per cent cut in power
bills across the state except Mumbai.
The implementation is apparently stalled because the power distribution company Mahavitaran Ltd has asked the state to deposit at least 10 per cent of the total subsidy calculated at Rs 7,000 crore.
The finance ministry says no funds even to comply with mandatory deposit requirement.
The Cabinet, last month, approved cost escalation demand of Rs 623 crore for delayed irrigation projects a majority of which are in Vidarbha.