Coping up with debt is biggest challenge for CM Fadnavis!

fadnavis

Mumbai: The completion of three year of Devendra Fadnavis government in Maharashtra comes with a mixed bag of ups and downs. While Fadnavis has been using all strategies to tackle the issues, state’s precarious financial situation remains his biggest challenge. The state’s debt burden has increased from Rs 2.9 lakh crore in 2014-15 to Rs 4.1 lakh crore in the current financial year.

A month after he took over the reins as CM, Fadnavis had raised the alarm about the state’s deteriorating financial condition while addressing a rally of state government employees in Nashik. Fadnavis had observed that his government would soon have to secure a loan to pay the salaries of the employees.

Endorsing the CM’s views, a senior bureaucrat told TOI that despite the best efforts of the Fadnavis government, the state has not been able to reduce the debtburden. During the past three years, the salary burden, too, has increased to Rs 87,147 crore at present from Rs 62,123 crore and pension to Rs 25,567 crore from Rs 17,385 crore.

Dhananjay Munde, leader of the Opposition, said while the debt burden has increased, development has not kept pace.
“We feel the CM should come out with a white paper on the state’s economy. Let the people of Maharashtra know where has such a large amount been utilized,” he said.

The bureaucrat said while on one hand there has been a spurt in the debt burden, on the other, the CM has declared projects worth Rs 1.5 lakh crore without making any budgetary provision. In the past three years, the BJP-led government has declared several projects (see box). In addition, the CM announced a Rs 34,022 crore loan waiver for 89 lakh farmers. Another Rs 22,000 crore will be required to implement recommendations of the Seventh Pay Commission. On June 28, the finance department, led by senior BJP leader Sudhir Mungantiwar, had imposed a 30% cut in the loan waiver scheme budget. So far, the department has not been able to establish the amount that will be mobilized following the cut.

A senior BJP leader said back in 1999, Jayant Patil, the then finance minister, had presented a white paper on the state’s economy. In 2014, Sudhir Mungantiwar presented a similar document. Both documents laid emphasis on massive reduction in the cost of establishment. “In the past 10 years, we had not been able to reduce establishment cost; in fact, we miserably failed in halting the growing expenditure on salaries. Our fiscal position is very poor. We will have to bring in drastic reforms.”

The government is also concerned over the real estate slump as well as decreased revenue from excise duty on liquor. Last year, against the target of Rs 23,547 crore, it could mobilize Rs 20,000 crore from stamp duty and registration of properties. Similarly, against the expected Rs 15,343 crore, it got Rs 13,600 crore from excise duty on liquor. Now, it targets Rs 20,000 crore from stamp duty and registration and Rs 14,340 from liquor excise.