Maharashtra government hikes spending on development works to 75% from 33%

In what could be seen as a sign of improvement in the state’s economy, the Maharashtra government has decided to increase spending on development works to 75% from

In what could be seen as a sign of improvement in the state’s economy, the Maharashtra government has decided to increase spending on development works to 75% from the current restriction of 33%. The fresh relaxations announced by the state government are applicable for around 21 departments that are expected to generate revenue and create jobs, state officials said.

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The government has also allowed 100% spending of local area development funds allocated through Member of Legislative Assembly Local Area Development Schemes (MLALAD), and 100% spending of district planning committee (DPC) funds. An order to this effect was issued by the state finance department on Tuesday.

“All the departments that make capital expenditures for revenue generation and job creation are allowed to spend 75% of the budget provisions. MLALAD are allowed to spend up to 100% of funds and development planning committees are allowed to spend 100% of funds for schemes related to general, scheduled caste and scheduled tribes,” stated the circular.

The departments that are allowed to make the increased spending are industries, energy, labour, general administration, home, rural development, water resources, revenue and forest, food and civil supplies and consumer protection, social justice and special assistance, agriculture, animal husbandry, dairy development and fisheries, public health, school education and sports, medical education, urban development, tribal development, finance, public works department, soil and water conservation, Maharashtra legislature secretariat, the order added.

The state government on May 4 declared a 67% cut in its spending for developmental works this fiscal, in view of the estimated revenue losses of more than ₹40,000 crore in March and April 2020, owing to the Covid-19 pandemic. The decision was taken to cope up with the financial crisis that started following the lockdown. The state had also decided not to take up new development schemes and scrap or defer the schemes that could be put on hold. Among other measures, the government had also decided to stop recruitment for government jobs.

“All the 21 departments can now spend 75% of the budgeted provisions by March 31 as they majorly help in revenue generation and employment generation. If the situation improves further, the state can increase the 75% limit,” said a senior official from the finance department.

“We had reduced the spending on MLALAD to 30%. Similarly, the spending on DPC was also reduced to 30%. They were also asked to spend only on Covid-19 related activities. Now, all the restrictions have been removed and spending under both the schemes can be made following the regular process,” the official said.