While this budget is also tipped to focus on asset creation, state will have to come up with something extraordinary to impress Mumbai
When in opposition, the Bharatiya Janata Party leaders had their own vision of budgeting Maharashtra’s needs in the state legislature, which the ruling Congress-NCP had happily dismissed. The BJP did implement one such idea while presenting its first budget last summer. It laid emphasis on creating assets rather than splurging money on things that would have no long-lasting effect in terms of capital gains. The party will present its second budget on March 18.
We learn that this budget too will take the BJP’s philosophy forward. But the question is, where will the government find the money to invest in capital works when its financial picture is far from rosy? Capital works did not get sufficient grants in 2015-16 because of increased expenditure in view of drought relief, toll waiver and the abolition of local body tax. Growth hasn’t been on expected lines and has impacted revenue badly.
What will state finance minister Sudhir Mungantiwar do to make up for the losses? Impose more taxes or make efforts to increase revenue collection without hiking duty? We expect him to do both — increase taxes and reform revenue collection. The minister has indicated that the forthcoming budget too will focus on creation of assets.
He is expected to concentrate on public infrastructure in rural areas, where the intensity of drought is far more serious this year. The minister may take a cue or two from the national budget as well.
Should Mumbai expect something extraordinary, at least on paper, considering the civic polls are next year? What will the state offer to the city where mega projects are being financed by international agencies?
The cash-rich MMRDA takes care of such projects, pumping in its own money wherever required. The Shiv Sena-led BMC does the bulk of the public works in the city. Considering these limitations, the FM and his boss, CM Devendra Fadnavis, will need out-of-the-box thinking to reach out to Mumbai with something extraordinary.
We’re sure the state will make an announcement pertaining to the International Finance Services Centre, a project that is being planned at the BKC complex in competition with Gujarat’s GIFT city. But hassled Mumbaikars do not necessarily think of the indirect impact of projects such as finance centres because it does not ease their daily struggles. The CM and FM should keep in mind their senior leader Nitin Gadkari’s exemplary work of building flyovers and viaducts, without which Mumbai’s traffic would have been worse than ever.
What can really make a difference is Metro projects, airports, sea-links, trans-harbour links and water ways, which are in different stages of planning, with their execution expected to take up more time.
Mumbai’s octroi regime is expected to continue till further notice because implementation of the Goods and Services Tax (GST) regime is still not clear from the Centre’s end. It was to be introduced from April 1 this year. The government will have to think of an alternative plan to make up for the losses if this doesn’t happen. We’re told the FM is already scouting for new sectors and will expand the tax net. Will revenue — increased this year by hook or by crook — suffice to invest in infrastructure, pay wage bills and mitigate yet another round of drought?
Deficits, both revenue and fiscal, are expected to deepen further this year. It will be interesting to see how seasoned paper pushers in the finance department assess and project the deficits in an expected plan size of Rs 55,500 crore for 2016-17.
The Budget session is expected to be ‘customarily stormy’ in view of allegations levelled against some BJP ministers and rising farmer suicides (the BJP regime has registered more deaths than the Congress). Coordination between two major opposition parties — the Congress and NCP will be put to test again.
Dharmendra Jore is political editor, mid-day. He tweets @dharmendrajore
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