63% revenue spent on salaries, interest | mumbai | Hindustan Times
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63% revenue spent on salaries, interest

mumbai Updated: Mar 21, 2013 01:20 IST
Ketaki Ghoge

For the second year in a row, deputy chief minister and state finance minister Ajit Pawar presented a state budget that can best be described as status quo, and at its worst as lacking vision.

If you thought the state budget would take on concerns of dismal state finances, lay down a blueprint for growth or even promise a few goodies a year before the polls, then disappointment is on the cards. The 2013-14 budget is in many ways a rerun of last year’s budget exercise. It has shied away from making any policy announcements or from taking on new development schemes. Instead, the focus has been on allocating resources for ongoing schemes and not losing sight of core sectors.

State mandarins who worked on the budget document defend the exercise saying there wasn’t any legroom to be populist. “You cannot expect him to pull a rabbit out of the hat. The focus was drought mitigation and this reflects in our allocation. We met our revenue targets, but our debt and salary burden, along with the drought, has left little for development,” said a bureaucrat.

Consider this. The state’s debt is the highest in the country and is slated to rise to Rs2.70 lakh crore by the end of 2014. Our annual interest payments for this year will be Rs21,098 crore. The wage bill – salaries and pension – comes to Rs76,818 crore. Taken together, that is nearly 62.77% of our revenues, leaving very little for development.

“Our capital expenditure – investment made in creating assets – is down to just 12%. And the annual plan size, which is expenditure on development, has also been cut by nearly Rs5,000 crore from last year. This is despite a hike in revenues by Rs11,000 crore from what was estimated earlier,” said Devendra Fadnavis, senior BJP legislator.

Fadnavis argued that investment and development was being curbed in a bid to ensure a revenue-surplus budget to meet the Centre’s fiscal responsibility norms. If state fails to maintain these, it will not get certain funds from the Centre. “There is total lack of vision. Other than adding and substracting a bit for ongoing schemes, the budget has nothing new,” said Priya Khan, director of Socio Political Analysis and Research Kendra.