Landmark decision takes big chunk of 1212 crore out of fiscal deficit of Rs 3,000 crore
MUMBAI : The four-month interim budget announced on Tuesday by Finance Minister and deputy Chief Minister Ajit Pawar, shows a fiscal deficit of Rs 3,000 crore, for the year 2013-2014 out of which Rs 1212 crore is due to the power subsidy for the rest of Maharashtra, which was announced in December by the government.
The trend for 2014-15 too is not positive, as Finance Secretary Suresh Shrivastav told Free Press Journal, “With the next budget too, there will be a deficit of Rs 5,000 crore.” The three schemes that have added to the total deficit of the budget primarily are Rs 1212 crore power subsidy, Rs 2,050 crore food subsidy, Rs 700 crore drought relief and Rs 131 crore for madarsas.
The deficit pressure however isn’t being felt as much as the per capita income has grown to Rs 1,05,493, a feature that the finance secretary says, “It does help in reducing the impact of deficit.”
Shrivastav however said, “The Centre has complained that our State doesn’t borrow more than it has been. Keeping in mind the deficit and debt, we still can. However, in the current situation, we are on safe ground.”
The borrowings from the Central government in 2012-13 was Rs 14,22.33 crore, in 2013-14 Rs 18,691.06 crore and it estimated that in 2014-15 the borrowings are estimated at Rs 17,545 crore.
The concerning part for the state of Maharashtra has been the looming debt of GSDP.
The state has recovered largely from alarming debt figures nine years ago of 25.5 percent, which in economic terms means ‘bankruptcy,’ in 2013-14 the state debt is at 17.7 percent and expected to be at 17.5 percent for the year 2014-15. Shrivastav says even the deficit burden will keep the state Well within the Centre’s norms of higher debt level, which is 22 percent.” He added, “We have a come a long way since last 10 years. It was a worry how we’d be faring, however the capital incomes have increased and that has helped us.”
The power subsidy is one major decision that has cut into the expenditure of the state, though the finance expert agrees, he said this is a landmark decision that would boost the industries’ competitiveness and help increasing employment. “The cross subsidy to the industry was detrimental to our state. However it is a landmark decision that will help in making the system more transparent for fare pricing, it will help in rebalancing expenditure and it will have a positive impact on employment in industry will take place,” said Shrivastav.