State mulls 20% cut in funds for development
The state’s finances are on shaky ground, with the finance department suggesting a 20 per cent cut in development funds this year. Ketaki Ghoge reports.mumbai Updated: Dec 23, 2011 01:25 IST
The state’s finances are on shaky ground, with the finance department suggesting a 20% cut in development funds this year.
The slash in the development plan, approved by the Planning Commission at Rs 42,000 crore, works out to around Rs 8,400 crore.
The cut is being linked to the roll-out to Vidarbha’s cotton farmers by the government. The relief announced for cotton, soya and paddy farmers will set the government back by around Rs 2,000 crore.
Officials said that the cut has also been necessitated by poor revenues and apprehension that the global slowdown would hit the state hard in the coming months.
The state’s revenue, especially from realty in terms of stamp duty and registration, is lagging behind its target of Rs 15,000 crore. Due to the sluggish realty market, the department has earned only Rs 5,000 crore so far.
Overall, the state has achieved only 55 per cent of the estimated revenue goal of Rs 1.23 lakh crore. Officials are not confident of meeting the target in the coming three months.
The chief minister has asked finance department to make a presentation before the cabinet to give a real picture of the state finances.
“It’s not just poor revenues that have led to this, but financial indiscipline and laxity. Government guarantees have been doled out to the tune of Rs17,190 crore, but even the guarantee fee has not been collected on this,” said Priya Khan, director of Socio Political Analysis and Social Kendra (SPARK), an organisation that analyses government policies and the budget.