Reeling under debt, Maharashtra plans to cut costs

Burdened with a high debt of Rs 3 lakh crore, the Maharashtra government is mulling issuing of a white paper or a status report on state finances, finance and planning minister Sudhir Mungantiwar said on Monday.

Burdened with a high debt of Rs 3 lakh crore, the Maharashtra government is mulling issuing of a white paper or a status report on state finances, finance and planning minister Sudhir Mungantiwar said on Monday.

“We are thinking of issuing a white paper on state finances. The state has a debt of Rs 3 lakh crore. In the last five years alone, they (earlier government) raised Rs 98,000 crore as loan. But, how much of it has gone to create assets?’’ Mungantiwar told HT.

Chief Minister Devendra Fadnavis while speaking to the media in Nagpur also underlined the likelihood of such an exercise but said it would be in the nature of a status report instead of a white paper.

The Congress-NCP government had defended the debt by saying that it was well within the parameters set down by the Centre at 17.5 % of the state’s total income.
Fadnavis, however, pointed out, “There is nothing wrong in incurring loans to run the state. But it should not go out of control. The spending should add to the state’s GDP.”

“I plan to hold meetings with every department to review expenditure plans. Only such schemes will be allowed where the end result will lead to creation of an asset, physical infrastructure or go to benefit a large populace will pass the muster,’’ added Mungantiwar.

The state’s revenue deficit has reached Rs 26,000 crore and the salary and pensions bill is estimated at Rs 83,590 crore for 2014-15.