Despite record deficit of Rs 15,000 crore, the state government is confident of financial recovery
Finance Minister Sudhir Mungantiwar along with Minister of State for Finance Deepak Kesarkar at the state assembly to present the budget 2018-19 on Friday. Pic/PTI
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The pre-election year budget for the state, expectedly, saw no new taxes, but had a record deficit of R15,000 crore and a rising debt burden of Rs 4.61 lakh crore. Despite the negative projections, finance minister Sudhir Mungantiwar said financial recovery was possible, but not without facing some serious challenges such as curtailing expenditure against income.
As expected, in view of the economic survey, the budget made a higher allocation (R77,000 crore for planned and non-planned expenditure) to the agricultural and allied sectors that are expected to show a negative growth this year. Of this, the water resources department will get a boost of Rs 10,000 crore for water conservation through the CM’s flagship Jalayukta Shivar project.
The huge provisions are seen as a fallout of the rising discontent among farmers, a section of which will culminate their 180-km-long march at Mantralaya on Monday. State employees, a large vote bank, have been given 7th pay commission pay scales, but with a rider. The payment (salary and pensions) will be fixed after a state-appointed committee submits its report. A provision of R10,000 crore has been made. The FM said an additional provision will be made in supplementary demands.
According to Mungantiwar, this year’s burden increased because of the ongoing farm loan waiver (Rs 10,000 crore allocation) and 7th pay commission to employees. “Debt is not a burden because we are in a position to service loans,” he said. Opposition leaders, however, contested the FM’s claim, saying that a massive deficit was an indicator of a very bad situation. “The BJP government hasn’t done much about the sectors that are lagging behind. This is the worst-ever budget,” said ex-FM Jayant Patil, who has the unique feat of having presented the maximum number of budgets as minister.
Patil said the allocation for sectors that needed a boost was insufficient. “The spend on capital investment is reducing every year. In our regime, this used to be more than 12%, whereas the BJP has a mere 9.8% this fiscal,” he said. This year, the annual plan has increased to Rs 95,000 crore. But, the Opposition said the figures on paper are not always realistic. “What matters is the actual spend throughout the year. They say it on paper, but don’t allocate funds,” Patil said.
Chief Minister Devendra Fadnavis said the budget would benefit all sections of society. “This is truly a pro-public budget that will bring the deprived classes into the mainstream,” he said.
One-time profession tax
The finance minister announced a reform to ease recovery of profession tax, but did not spell out a clear policy. Later, he said that the government was planning to come out with an attractive policy of recovering one-time profession tax, which now ranges between Rs 1,000-2,500 per year, depending on income slabs.
The scheme is being planned in view of difficulties in recovering profession tax from salaried individuals (non-government) or private companies that collect the tax but don’t pay up. Sources in the finance department said the scheme would have professionals pay a one-time tax (such as vehicle tax for a period of 15 years) for the period they are expected to serve. If they pay one-time tax, the professional will not need to pay for the remaining service period.
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