Mumbai: The 11-member expert committee comprising serving and retired bureaucrats on Monday suggested that the Maharashtra government will have to find new resources including more borrowings to meet the expenditure during and after the coronavirus crisis.
The committee, which has been mandated with making suggestions for the revival of state economy, at its second meeting held today said the state public debt, which is expected to cross Rs 5.20 lakh crore in 2020-21, will be 16.6% of the gross state domestic product which enables the government to raise at least additional 2% public debt.
The 16.6% debt, if it will increase to 18.6%, will be lower than the limit of 20% of GDP suggested by the FRBM Review Committee (2017) for the cumulative debt of all states. The committee was unanimous that the government has sufficient headroom to go in for additional borrowings.
In 2020-21, Maharashtra is estimated to spend Rs 1,91,451 crore on committed expenditure including payment of salaries, pension, and interest (equivalent to 55% of the state’s revenue receipts).
This implies that the state has 45% of its revenue receipts remaining for all other kinds of expenditure. Any additional expenditure will be met through borrowings.
On average, 50% of the revenue receipts of a state are spent on committed expenditure. The committee members observed that these budget estimates, however, will have to be reworked as there has been practically no tax collection during the lockdown. The committee members told FPJ,’’ Revenue impact will be there.
To support vulnerable sections and keep government’s spending in motion, government will have to raise more debt.’’ Further, the committee at length discussed at length the industry protocol including movement of personnel, raw material and finished products and also protocols within the factory.
For agriculture, the committee discussed the kharif season preparedness for inputs and movement of horticultural crops including bananas and mangoes. As far as logistics is concerned, which is badly hit to the lockdown, the committee discussed how the truck drivers can follow cleanliness and how often trucks and drives to be sanitised.
They also suggested that the government may consider setting up of sanitisation stations at some points. Further, the committee discussed the present state of the services sector including film industry works, hospitality, restaurant and its revival after the coronavirus crisis over. The committee will meet on Wednesday as it has submitted report to the
