Pushed by the Centre, the state’s finance department has issued a notification laying down certain new fiscal targets for the government that is likely to tighten the state’s purse strings in the coming four years.
The notification was tabled before the state Assembly on Monday, enumerating rules to amend the Maharashtra Fiscal Responsibility and Budgetary Management Rules, 2006.
With this amendment, the state government can achieve zero revenue deficit for the period from 2011-12 to 2014-15. It will have to get its fiscal deficit to 3% of its Gross Domestic Product (GDP). It will have to reduce its debt so as to bring 26.1% of GDP in 2011-12 to 25.3% in 2014-15.
These targets have been laid down in the 13th Finance Commission and are mandatory before the state can receive grants from the Centre. The state is expected to get Rs91,709 crore from the Centre as financial assistance, including Rs16,302 crore as grants.
If the state has to achieve its targets, it will have to tighten its purse strings and be careful while providing government guarantees. The targets have also ruled out populist budgets till 2015.
The state has a debt of Rs2.36 lakh crore, the largest in the country. “We are not in the red because we can shoulder the debt burden. The ratio of our debt vis-a-vis our GDP is under control. We plan to reduce it further,’’ said a senior finance official.