Cash-strapped govt to spend little on welfare

  • Surendra P Gangan
  • Updated: Mar 19, 2016 01:28 IST


Scrapping the local body tax, toll exemption and drought mitigation measures have severely burdened the state coffers, resulting in lesser funds flowing into development and welfare projects.

The debt burden this year is at Rs3.56 lakh crore, up by a whopping Rs24,000 crore from the previous year. The rising deficit of Rs9,290 crore is not making this easier for the Bharatiya Janata Party (BJP)-led government.

The burden has consequently resulted in lesser amounts being allocated for development and welfare — just an addition of Rs2,000 crore — the lowest in the recent past.

The budget for health, roads and bridges (public works), power, industries has been reduced. There is a limited rise in allocation for irrigation projects and other departments.

With the looming concerns of global slowdown and falling crude oil prices, the government has estimated lesser revenue in 2016-17.

Though the BJP-led government has been boasting of sizable allocation for the irrigation projects on the backdrop of the irrigation scams, an additional Rs578 crore over last year’s funds have been allocated for such projects this year.

According to officials, given the meager allocations, the state will not be able to complete the pending projects for years.

“It is true that we have not been able to make sizable allocation for irrigation projects, but we are mulling the idea of taking loans for the projects,” said finance minister Sudhir Mungantiwar. He said that with saturated sources of taxation, the government is expecting an addition of Rs363 crore through a rise in taxes.

The estimated fall in the revenue receipts is expected to take a toll on health schemes and power generation projects.

A slump in the housing and urban development segment was also a dampener as the state government had expected Rs6,067 crore as from premiums on FSI in SRA schemes and other real estate sectors.

The actual receipts amounted to just Rs1,067 crore. With Dharavi and BDD chawl redevelopments and MoUs signed with private builders, the state has estimated similar receipts, a hope that officials say may prove futile.

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