Even as state finance minister Ajit Pawar readies to table a fresh budget on Wednesday, over a third of the development funds earmarked for schemes last year have not been spent.
As on Monday, the state had released only 73% of the Rs40,492 crore sanctioned for development works in 2012-13. The actual utilisation of these funds is even lower, at Rs27,779 crore.
For instance, the water resources department could spend only 61%, the housing department 30%, the cooperatives department spent 65% and rural development department only 67% of their total budget. In the first nine months, the state spent less than 40% of its development expenditure.
"This shows that the state does not have the capacity to utilise funds. What's worse is that the debt and wage bill has shrunk our development expenditure to less than 35%. But, even this does not get spent," said Priya Khan, director of Socio Political Analysis and Research Kendra (Spark), an organisation that analyses budget documents.
Spark released a report on Monday that showed how the state’s finances have gone awry.
Consider this: The state will have to spend Rs18,523 crore or 13% of its expenditure this year on interest payments. Its wage bill — only salaries and pension — stands at around Rs 68,274 crore or nearly 50% of the total expenditure.
This trend will leave fewer funds for development every year. A senior official told HT, “This year, we were told informally there would be a cut in the development budget due to poor revenues. But, whether it is a cut or inability to spend, at the end of the day it is a failure to create assets or infrastructure.”
The state government has defended its huge debt by pointing out that it is well within the norms laid down by the Centre, and will be used for development.
But experts and critics disagree. “Even if the debt is within the norms at present, this trend is not sustainable. The state is no longer using debt to create assets or for development. It is largely going towards debt servicing,” said Khan. She said it is worrisome that the state’s liabilities are growing at a rate of 9% to 11%, but income is growing only at 8%.
A Reserve Bank of India report for 2012-13 on state budget pointed out that the state’s total liabilities including the debt, government guarantees, advances etc. had already crossed the norms laid down by the Centre, and stands at 26.7%.