Cash-strapped stateto cut development expenditure by 40%

  • Shailesh Gaikwad, Hindustan Times, Mumbai
  • Updated: Dec 08, 2014 00:54 IST

As the BJP-Shiv Sena alliance government is gearing up for its first session of the legislature, it has a serious problem to handle: Paucity of funds.

With its coffers empty, the government will be slashing its expenditure, especially on development projects and schemes, by 40% in the next three months till the budget is prepared. “There are no funds in the state exchequer. We have no option but to apply a cut to the expenditure or else soon we won’t even have money to pay salaries [of the staff],”said revenue minister Eknath Khadse, after the government’s customary tea party.

He said the government will review several decisions taken by the previous Congress-NCP government to control expenditure.

“Decisions benefiting individuals or specific constituencies meant for ruling party legislators in the last tenure will be reviewed,” he said. In the run-up to the Assembly elections, the Congress-NCP government had taken decisions as well as announced new schemes involving expenditure of Rs50,000 crore. Now, the government plans to review these decisions.

“Some tough decisions will have to be taken. We will discuss these issues during the session,” said Khadse. Chief minister Devendra Fadnavis also told his ministers to find out how they can reduce expenditure of their departments.
Currently, the state has a debt of Rs3 lakh crore. The government is also staring at an alarming increase in revenue deficit.
Khadse insisted the cut in developmental expenditure was in fact constantly applied by the previous Congress-NCP governments.

The state has a challenging situation since it will have to tackle drought in more than 20,000 villages in the state and provide relief to cotton, soyabean growers and other farmers whose crops were affected this year. “We are considering paying some compensation to the farmers and discussing ways to do it,”said Khadse.

However, the government will not resort to increasing taxes immediately. “There are no plans to increase sales tax. We will just make some changes in tax system to remove some drawbacks and increase our revenue,” said Khadse.

NCP leader Ajit Pawar criticized Fadnavis’ demand. He asked why the Centre’s intervention was needed in a state matter and opposed the move.

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