Health and infra get major share in MVA’s second budget
Struggling with paucity of funds owing to a significant shortfall in revenue caused by the Covid-19 pandemic and the subsequent lockdown, the Maharashtra Vikas Aghadi (MVA) government on Monday presented its second budget that aims to spur growth.
Presenting a budget of ₹4,37,961 crore for financial year 2021-22 in the legislative Assembly, deputy chief minister Ajit Pawar announced interest-free loans for farmers; a slew of infrastructure projects, including a semi-high speed corridor between Pune and Nashik; plans worth ₹12,500 crore for health infrastructure; and sops for women, such as free bus rides for girl students. These announcements were made even though cash crunch is expected to be a major problem for the state, with the economy yet to recover from the impact of the lockdown. Meanwhile, liquor will cost more in Maharashtra from April 1 as Pawar increased taxes on it as the only means to generate some more revenue.
Revenue generation in 2020-21 in Maharashtra is expected to drop by a whopping ₹57,959 crore and could even go further up to ₹1 lakh crore if the state’s share of taxes is not released by the Centre in time, according to Pawar.
Against the estimated revenue of ₹3,47,457 crore, the state now expects to generate ₹289,498 crore by the end of the ongoing financial year.
“This means the shortfall in the revenue generation is
₹57,959 and if the Centre fails to release our dues towards GST compensation, central taxes devolution and share of centrally sponsored schemes, it may mount up to ₹1 lakh crore,” Pawar said.
The agriculture sector, which is expected to register a growth of 11.7% in the current financial year, got a boost in the budget. “The farmers can now avail interest-free loans up to ₹3 lakh. The existing crop loan scheme, which gives interest-free loans up to ₹1 lakh and at 2% for additional ₹2 lakh, has now been revised,” said Pawar. Of the 15 million farmers in the state, around 35% avail the crop loan every year.
Pawar also announced 66% concession to farmers in their pending electricity bills under the amnesty scheme the government launched on January 26.
In view of the pandemic, Pawar announced a package of ₹7,500 crore for the upgradation of health infrastructure over the next four years. Further, he announced ₹5,000 crore for improving quality of health services in tier-two cities in the next five years. These smaller cities struggled in handling the pandemic.
The MVA government will be building a 235-km semi high speed train corridor connecting three major cities--Pune, Ahmednagar and Nashik. The train will run at 200kmph speed and is estimated to cost ₹16,039 crore. It is also constructing a coastal highway connecting three Konkan districts--Raigad, Ratnagiri and Sindhudurg — to promote industries and tourism in the region, which has been a strong support base of Shiv Sena.
Also, Pawar announced free bus rides for girls travelling to schools and 1% concession in stamp duty if a new house is bought in the name of a woman. The homebuyers pay 4 percent stamp duty and charges on the agreement value while registering new property. Women buyers will have to pay 3 percent.
“This would put a burden of ₹1,000 crore against the waiver,” he said.
Eyeing the elections to Brihanmumbai Municipal Corporation (BMC), which is ruled by the Shiv Sena for more than 25 years, finance minister referred to infra projects, tourism development projects in Mumbai. There was also announcement of a Bal Thackeray memorial worth ₹400 crore, two dedicated cycle tracks on eastern and western express highways and rejuvenation of Mithi, Dharavi, Boisar and Oshiwara rivers.
State government has also proposed to build a new water transport route connecting Vasai and Kalyan —both cities are on the periphery of Mumbai — with four passenger terminals between them.
The reduction in revenue, outstanding dues with the centre and expenditure incurred on fighting the Covid pandemic has forced the state government to borrow more than expected this year.
The borrowing is also expected to grow because of the widening gap between the receipts the borrowing. With ₹87,190 crore and ₹76,866 crore to be borrowed in 2020-21 and 2021-22, the debt stock is ₹1.64 lakh crore, which is 27% of the total debt state raised over years. Total debt on state is estimated to be ₹6,15,170 crore in 2021-22.
With little room left for the hike in taxes and duty for mobilization of the resources, the state government has proposed to high 5% value added tax on sale of liquor and rise in the state excise duty to manufacturing of the branded country liquor.
Meanwhile, former finance minister and BJP leader Sudhir Mungantiwar said, “The state has failed to give any package to the most affected sectors like construction, services sector. It gave 1% waiver in stamp duty to women if the houses are registered in their name, and gave 3% waiver to builders. Is it not discrimination? The state government should tell the people of Maharashtra, that how has it used or decided to use ₹1.75 lakh crore being borrowed in two years.”
Leader of opposition and former chief minister Devendra Fadnavis criticised the budget and said it to be the jugglery of figures. “None of the sectors has got anything from the budget. Youth, farmers, women, backward classes will be disappointed from the budget. The infrastructure projects that have been referred in the budget are existing ones and under implementation via the central government funding. Many of the schemes which have been referred in the budget are ones state government does not spend a single penny on,” he said.