Maharashtra faces revenue deficit of Rs 26,516 crore
The figure, which made the new ministers' jaws drop at a state cabinet presentation, will prevent the BJP govt from fulfilling promises made in its manifesto including abolishing local body tax and tolls at least in the short term
It’s going to be a long wait for those expecting the advent of good days under the new BJP government in the state. A recent presentation before the state cabinet led to the jaws of the new ministers dropping when they realised that Maharashtra faces a revenue shortfall of Rs 26,516 crore.
Make it stop! Officials said the Fadnavis government has decided to knock on the doors of the Centre to bail the state out of the financial crisis
The projected deficit for 2014-15 was pegged at Rs 4,103 crore when the then finance minister and deputy CM Ajit Pawar had presented the budget in June. Government officials said the five-fold rise in revenue deficit is not just because of a drop in collection of state taxes or duties, but also because of the several pre-poll sops the previous Congress-NCP regime announced despite the adverse opinions and warnings from babus.
The sops, worth more than Rs 10,000 crore, included relief in power bills for households consuming less than 300 units a month and for agricultural users, hike in salaries for certain sections of state government employees and grants to educational and other institutions.
Nothing for voters
The impact of all this will be felt by the voters, as the Devendra Fadnavis-led government will not be able to fulfil the promises in the BJP manifesto, at least in the short term, due to want of funds. “We cannot announce any relief to our voters, at least during the current financial year, because the state’s kitty is bleeding.
The financial scenario is so alarming that we will have to take people into confidence through the white paper on the state economy, which was announced by the Governor during the joint session of the assembly,” said a senior BJP minister.
Government sources said financial worries have been holding back the Fadnavis government from scrapping the Local Body Tax (LBT) and toll collection, which were two of the BJP’s key poll planks. While abolishing LBT would put an additional burden of R14,500 crore on the exchequer to meet the demand from municipal corporations, scrapping tolls would also need a huge amount as it would involve compensating toll collection agencies.
The meeting on LBT, convened by the CM on Thursday remained inconclusive as no decision could be taken on implementing an alternative tax collection system or supporting municipal corporations from Maharashtra’s coffers, sources said. LBT is the main source of revenue for municipal corporations in the state.
All eyes on Centre
The spectre of drought looming over some parts of the state will also lead to further pressure on the state’s finances. “The Fadnavis government has now decided to knock on the doors of the Centre to bail the state out of the financial crisis,” said state officials.