40% cut to development outlay in Maharashtra; lawmakers get whopping rise in local development fund

The Maharashtra government issued a government resolution (GR) on Friday, directing all the departments to plan the expenditure on development works (scheme expenditure in government parley) in such a way that it is restricted to 60%
The state government also increased the local area development fund for legislators to Rs4 crore a year from the existing Rs3 crore a year.
The state government also increased the local area development fund for legislators to Rs4 crore a year from the existing Rs3 crore a year.
Published on Oct 14, 2021 09:32 PM IST
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By Surendra P Gangan, Mumbai

Amid the financial crisis due to the Covid-19 pandemic, the state government has initiated a cut to the development funds by 40%. This means the state government would be able to spend around 60% of the 1.30 lakh crore budgeted outlay for the development works.

The state government issued a government resolution (GR) on Friday, directing all the departments to plan the expenditure on development works (scheme expenditure in government parley) in such a way that it is restricted to 60%. The departments have also been instructed that 50% of the outlay for the development works will be released by December-end while the remaining will be released till the end of the fiscal year 2022. The committed expenditure, meant for wages, pension, the interest of the loans, repayments of the loans will however be released cent per cent of the outlay.

“In first two quarters, we had released only 30% of the outlay for development works. It has been increased to 50% by the end of the third quarter due to the improvement in the revenue receipts in the second quarter ended in September. If the receipts improve further, we may take the expenditure to 70 to 75% by the end of the year. We are in a better position this year, as last year the funds of the development works were released only for the inevitable heads like district development funds, expenditure related to public health and schools etc. We had to borrow heavily for committed expenditure and it led to the fiscal deficit of around 46,000 crore in 2020-21,” said an official from the health department.

The revenue receipts of the state by end of September were merely 35% or 1.29 lakh crore against the annual estimates of 3.69 lakh crore. All the major sectors including excise, stamp duty and registration, taxes on vehicles and GST have received beating due to the Covid-19 pandemic.

“We cannot cut short the expenditure on the committed expenditure on salary, pensions and other establishment cost, interests and repayment of borrowings, which is collectively more than 60% of the revenue receipts of 3.69 lakh crore. Result of it, the development works get hampered,” another official said.

Meanwhile, the state government also increased the local area development fund for legislators to 4 crore a year from the existing 3 crore a year. The rise was announced in a budgetary speech by finance and deputy chief minister Ajit Pawar. This has been the consecutive rise of 1 crore each for the past two years as it was rose to 3 crore in 2020-21 from 2 crore existed since 2011-12. The decision announced on Friday will burden the state exchequer by 350 crore more. Around 288 MLAs and 62 MLCs will get 1,400 crore in the ongoing financial year. “This is the compliance of his assurance given during the budget session. The rise in the local area development fund will help to boost the development works at the local level,” reads the statement issued by the office of Pawar.

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Tuesday, October 19, 2021