Mumbai: Back to the wall, the Maharashtra Government on Monday decided to axe its planned expenditure by 67% cut in 2020-21 following the revenue shortfall and the precarious financial condition of the state owing to the pandemic.
In the total planned expenditure of Rs 1,12,000 crores, there will be a gaping hole of Rs 75,000 crores, leaving a paltry Rs 35,000 crore (33%) for various departments to spend on various schemes in 2020-21.
All new purchases, new construction, recruitment, introduction of new schemes and their implementation have been put on hold till further orders. The government has asked all departments to review their plans based on the availability of only 33% of funds.
The government has identified public health, medical education and drugs, food and civil supplies and relief and rehabilitation as priority expenditure heads. Priority would be also given to implementing centrally sponsored schemes, payment of salaries, pension and honorium. The department will need to take approval of the state finance department if it has to cut expenditure on a central government scheme.
Further, the departments have been asked to review implementation of various schemes in pipeline and defer or cancel a few, considering the financial constraints. The instructions are loud and clear: They should not undertake any new scheme or new head of expenditure till further orders.
Chief Secretary Ajoy Mehta has directed all departments to strictly adhere to the austerity measures, as the financial squeeze is likely to last at least for three months due to the overwhelming coronavirus crisis. He said the revival of economy was a huge challenge despite the government taking a decision to cut the salaries of ministers and legislators and staggering the salaries of government employees.
The notification has comes at a time there is a revenue shortfall of Rs 1,40,000 crore in the revenue receipts, which were projected at Rs 3,47,000 crore in the annual budget 2020-21. This is around 40% of the expected revenue which is expected to leave a huge deficit in the state finances.
The departments have been told to spend on charged expenditure, including salaries of high court judges, debt repayment and interest payment. However, the departments should not go in for negative budgeting. Other departments have been prohibited from spending on repairs and maintenance of office equipment and their purchase.
The departments would not undertake new construction activity, nor give technical and administrative consent, float tenders and issue work orders till further orders. However, the departments have been allowed to continue with the ongoing works whose orders have been already issued. All departments have been permitted to undertake pre-monsoon works.