Budget session of the state assembly is set to start on a gloomy note on Tuesday with Madhya Pradesh facing a financial as well as agrarian crisis.
The state government is in fact looking for the ways and means to generate more revenue to meet the requirements of different sectors when the flow of funds from the Centre is not as smooth as it used to be and the ruling party is poised to face assembly elections in 2018.
In October last year, chief minister Shivraj Singh Chouhan had announced a 15% cut in the annual budget to provide relief to the farmers while admitting it might affect the development work in the state. According to economists and civil society members, the impact on the social sector was huge as the budgetary cut went up to 50% in the current fiscal year.
Meanwhile, a finance department circular, dated October 19, 2015, underlined that the grants from the Centre to the state were likely to be reduced by 30% in 2015-16. The letter also admitted that revenue collection was affected ‘due to decline in growth rate of manufacturing sector in the country since 2013-14.’
“There has been an adverse impact on kharif crop in a large area of the state due to weak monsoon. Hence, there was immediate need for additional financial resources to provide relief to the affected farmers,” said the department circular.
Sachin Jain of Vikas Samvad told HT: “There has been a huge cut in the social sector budget up to 54% in the current fiscal year, resulting in adverse impact on Sarv Shiksha Abhiyan, health, MNREGA, integrated child development scheme and several other schemes of social sector.”
Jain said the budgetary allocation for the social sector schemes, particularly those meant for weaker section including women, children, old and destitute, needed to be increased.
Sanket Centre for Budget Studies (SCBS) programme director, Pallavi K Mali, said the budget analysis is a bit difficult this year as no information was coming from the government or from the districts as to how much money was released for which scheme. “There seems to be lack of transparency,” she added.
She said less revenue collection and growing debt burden on the government should be the areas of major concern for the government. However, she added, the state was to get `10,000 crore through 14th Finance Commission and it remained to be seen how the state spent the amount on the development of the state.
Economist Jayantilal Bhadari said 48 lakh farmers and 44.17 lakh hectare land were affected by drought. The farmers expected much needed relief from the budget.
The country’s industrial growth in 2014-15 was 7.2%, but the same in Madhya Pradesh saw a decline of 12.1%. The state government employees were also expecting allocation of budget for them in view of 7th Pay Commission report.
However, he said, the state’s finance minister had limited resources. The state government was burdened with a loan of more than Rs 1.15 lakh crore. Thus, the state was faced with economic/financial difficulties. Thus, in the situation, the state faced a major challenge to generate `1.45 lakh crore for the budget of 2016-17.