Bankrupt state announces Rs 10,050-cr poll sops

Feb 07, 2014, 07:18 IST | Ravikiran Deshmukh

While the state govt has announced a whopping 57 projects in the first month of election year, DY CM Ajit Pawar has clearly said there is no money in the state’s coffers

In its zeal to score a point over its political rivals, the Congress-NCP government has announced 57 projects and schemes since Jan 2, which, for implementation, would claim funds to the tune of Rs 10,050 crore from the state exchequer.

The irony lies in the fact that the state government, with its finances particularly straitened, cannot afford to put its money where its mouth is. And while the state’s precarious financial condition was no secret, the alarming confirmation has come directly from the horse’s mouth this time – the Deputy Chief Minister Ajit Pawar, who also heads the state finance and planning department.

The state is now bent under a debt burden of Rs 2.90 lakh crore. The food and civil supplies department, which is responsible for implementing the ambitious Food Security Programme, has made a demand for substantial funds with which to purchase food grains from the open market.

The finance department has not accepted this demand yet. Moreover, the Mahavitaran, which is the state’s power utility, has clearly told the government that unless Rs 707 crore is deposited in advance, the decision to extend a monthly 20 per cent cut in power rates cannot be implemented for the benefit of consumers.

The rising alarm was palpable in Ajit Pawar’s voice on Wednesday, when he spoke out at the state cabinet meeting, saying that not a single project or scheme was going to be implemented, as no funds were available with the finance department. ‘Stop, stop,’ he said, interrupting a debate that was underway at the cabinet meeting in Sahyadri state guest house.

He continued, “Let me speak as in-charge of the finance department. Do not go for approval for projects or schemes of your choice, as if the state exchequer is crammed with cash. Not a single scheme you are going to approve will be implemented.” His words left his cabinet colleagues bewildered.

Pawar’s assertions put a question mark on the government’s decision to allocate Rs 100 crore for a statue of Chhatrapati Shivaji off the coast in the Arabian Sea. This was one of the projects announced on Wednesday.
According to sources, Senior Congress Minister Narayan Rane told the meeting that the 13 subjects listed on the agenda needed funds worth Rs 438 crore. “Where is the money going to come from?” he asked the cabinet. His question was met with complete silence. But 13 decisions were made for different projects and schemes.

On January 13, the state finance and planning department issued a circular, applying 20 per cent cut to the annual plan expenditure, and 10 per cent cut to non-plan expenditure. According to a senior functionary in the Democratic Front government, almost all the proposals approved during the seven meetings of the cabinet between January 2 and February 5 have received adverse comments from the finance department. As per the rules, each proposal, before its introduction in state cabinet meetings, goes through the scrutiny of the finance department.

The finance department is worried about the availability of funds. Despite its adverse comments, the state cabinet decided to extend benefits of food grains at cheap rates for 1.77 crore beneficiaries who could not be accommodated in the Food Security programme under the UPA government’s guidelines.

To provide food grains to these beneficiaries who are above poverty line (APL), the Food and Civil Supplies department has decided to spend Rs 1,200 crore per year. It now requires funds and has asked for a part of it from the finance department, but the latter is in no position to sanction the money. Meanwhile, the state government was so shocked by the gloomy admissions made in the meeting that very few decisions listed in the press release were accompanied by amounts required for their implementation.

Neeraj Hatekar, professor in the Economics dept of Mumbai University, said that the project or schemes announced by the state are electoral ones. “Since the state is approving proposals in bunch, certainly it is going to effect the state economy.

In fact, the state should have approved certain valid proposals – such as that of Anganwadi employees – much in advance. But, approval for such a large number of project or schemes, given with the elections in mind, will take a toll on state finances. How far these are sustainable should have been taken into consideration. Already the tax collection is slow due to overall sluggishness in market, which has lowered the revenue collections.”

Major projects that have been announced

Rs 258 crore
Jawahar wells programme

Rs 100 crore
Chhatrapati Shivaji Statue and memorial

Rs 622.84 crore
Cost escalation of irrigation projects

Rs 84 crore
Extension of Ozar airstrip at Nashik

Rs 606 crore per month
20 per cent cut in power bills

Rs 200 crore per month
Benefits of food security program to people under the poverty line

Rs 49 crore
Insurance premium of Anganwadi employees

Rs 47 crore
Increase in allowances to Home Guards

Rs 43 crore
Time bound promotion to teachers in non-aided schools

Rs 27 crore
Irrigation project in Konkan division

Rs 25 crore
Improvement of farm tanks

Rs 15 crore
Technology university

Rs 2.9 lakh crore
State’s current debt

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