BHOPAL: Demonetisation has adversely impacted the finances of the state government. Post-demonetisation, the revenue collection in the state is going southwards – so much so that the state government may have curtail the budget for 2017-18. At a meeting between chief minister Shivraj Singh Chouhan and additional chief secretary, Finance AP Shrivastava on Thursday, Chouhan was apprised of the  financial situation of the state.

With revenue collection of the state government declining, the government is finding it difficult to make even necessary expenses.  Chouhan and Shrivastava had a discussion on the issue of granting seventh pay scale to employees. Chouhan had promised employees that they would get the new pay scales along with their central government counterparts.

Finance department has told Chouhan that giving seventh pay scale will further worsen the financial condition. The proposals from the departments for the next year’s budget have started pouring in.The state budget for the year 2016-17 was of Rs 1.58 lakh crore while it was Rs 1.30 lakh crore for 2015-16. Budget of the next year is prepared considering revenue collection of the running year. The inflow of income to state government from commercial tax, transport and Mandis has declined following demonetisation. It is expected that this situation would continue till March. At the same time, the projections of revenue collection for the coming financial year are also not encouraging. That is why, finance department is not in a position to increase allocation to departments, as was done in past years, in the budget.

Considering poor financial condition of state government, ban on purchases, which is generally imposed between January 15 and February 1 has been imposed from December 15 this time. On the other hand, finance department is avoiding clearing bills of the departments. The unspent money allocated to different heads is being adjusted against other heads. Finance department has begun to take measures to ensure that money allocated to departments be lapsed so that allocation of such departments could be curtailed in the next year’s budget.