State initiates cut to budget; key departments fail to utilise allocation

Mumbai: Based on the revenue receipts recorded so far, the state government, in an order issued this week, has directed all the departments to spend just 80% of their budgetary allocation till further directives

Mumbai: Based on the revenue receipts recorded so far, the state government, in an order issued this week, has directed all the departments to spend just 80% of their budgetary allocation till further directives. It will affect the development works for which over ₹1.50 lakh crore was earmarked for the financial year 2022-23.

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While the state government has initiated the cut, most of its departments have failed to utilise their outlay. The overall utilisation of the outlay of the budget has reached just 47.3% of the budgeted allocation. School education department has spent the highest 79%, while the tourism and cultural department has fared poorly with just 15.87% spent so far.

The fund allocated for the district development committees, the area development funds of legislators and the matching grants given for centrally sponsored schemes have been excluded from the diktat. The cut to the budgetary allocation is expected to result in less funds to be released for development works.

Of the annual budget of ₹4.03 lakh crore, over ₹1.50 lakh crore has been allocated for the development works. Besides, over ₹51,000 crore comes from centrally sponsored schemes implemented in the state. The allocation is done for various infrastructure projects and social welfare schemes.

After the change in the government, the Shinde-Fadnavis government reportedly diverted funds for the development works in the constituencies of the MLAs from the Shinde camp of Shiv Sena. It was reflected in the supplementary demands of a whopping ₹52,000 crore, according to the officials from Mantralaya.

Though the departments have been directed to restrict the expenditure to 80%, the finance department has stated that the percentage would increase towards the end of the financial year.

“Though the revenue receipts until January end have touched 75%, it will cross over 90% by end of the year. Based on the receipts, more funds are released in the last few days of the financial year. We expect the restriction to be released to around 95% by end of the year,” said an official from the finance department.

The state government is banking on the revenue collection from key segments like GST, stamp duty and registration which registered the collection up to 75% and 93%. The collection from these heads last year were merely 57 and 65%.

Meanwhile, the key government departments, besides tourism and culture, housing (16.4%), industries (18.29%), planning (20%) have performed poorly in spending. Apart from the school education, technical education (77.06%), cooperation (75.04%), law and judiciary (72.58%) are amongst the top performers.

“The release of the funds for the departments was allowed up to 60% of the allocation until December end. It is true that the utilisation is low, but it has been a regular trend for years. The utilisation of the fund reflects only after the bills are settled after completion of the works. Most of the bills are settled in the last few days of the financial year. Some of the bills are even settled in next financial year for the scarcity of funds,” another officer from the department said.