30% pay cut for Maharashtra’s legislators this year; 2 panels to help revive state’s economy

Even as the state stares at an unprecedented revenue drop owing to the coronavirus outbreak and the lock down, the Maharashtra government set up two committees to

Even as the state stares at an unprecedented revenue drop owing to the coronavirus outbreak and the lock down, the Maharashtra government set up two committees to look into the measures to revive the economy.

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On Thursday, the state cabinet cleared a proposal to appoint two high-level committees to deliberate on the measures to be taken in the coming months. The cabinet also decided to cut the salaries of Members of Legislative Assembly (MLAs) and Legislative Council by 30% beginning this month till March 2021 in the light of the brunt borne by the state’s economy owing to the coronavirus crisis.

“In the backdrop of the coronavirus crisis, the state cabinet has decided to form two committees for economic revival. One committee will consist of ministers, while other will have finance department officials, former bureaucrats, economists, and financial experts, who present their recommendations to the government,” said Ajit Pawar, deputy chief minister and state finance minister.

Apart from Pawar himself, the ministers’ panel will also include senior ministers Jayant Patil, Balasaheb Thorat, Chhagan Bhujbal, Anil Parab, Eknath Shinde and Ashok Chavan.

Manoj Saunik, additional chief secretary, finance, said the expert committee will recommend measures that can be taken by the government to bring the state’s economy and finances back on the track.

“Today, only the approval to form the committees was given. In a day or two, the members on the non-ministerial expert committee will be decided. We will now have to take a multi-pronged approach. First of all, we will have to reopen our economy [as and when possible], then we will have to increase liquidity, etc… The load on citizens [in terms of taxes/duties/cess] will not be put unless absolutely necessary,” Saunik said.

According to senior officials, Maharashtra has taken a severe hit due to the lockdown, with the state’s revenue witnessing a drastic plunge. Saunik said the state’s March revenue dipped by ₹30,000 crore from what it had earned in February.

A finance department official added that apart from the dip in the revenue, the state’s has also incurred huge expenses while combating the coronavirus outbreak in Maharashtra. The government is now banking on the Goods and Services Tax compensation, worth ₹16,000 crore, as well as funds from the Centre, to relieve the strain on its coffers.

Meanwhile, the state government is expected to save around ₹31 crore annually by the 30% pay cut for its legislators in 2020-21. The state government has also decided to request the urban and rural local bodies to bring a similar proposal and initiate pay cuts for their elected members.

The state’s decision to cut the legislator’ salaries came two days after the Union cabinet announced that Members of the Parliament (MPs) will undergo a pay cut this year.

“The decision is more of a gesture to send out a message to the public. The savings from such cuts is hardly anything against the total revenue receipts of the state,” said a senior cabinet minister.

The state government had last week decided to defer 60% of the March salaries of the elected representatives after the drastic drop in the revenue receipts in the last month of the financial year 2019-20.