The state government’s biggest challenge in the 2016-17 Budget is to address the recurring negative growth in the agriculture sector, which, overall, casts its bearing on the Maharashtra Gross Domestic Product (GDP). As a result, it plans to make higher investments in agriculture, irrigation and infrastructure to meet the socio-economic growth in the state.
The Maharashtra Budget Session will commence from March 9. The Budget would be presented on March 18.
The Budget is being tailored to translate the gains in Make In India to work to Make In Maharashtra’s advantage. For which, the government is exploring non-conventional sources to mobilise revenue and also developmental models, specially in agro-industries.
At the end of a series of meetings held by Chief Minister Devendra Fadnavis and Finance Minister Sudhir Mungantiwar, it is evident that the government is confronted with a difficult road ahead to match the demand for higher capital expenditure and sustain the heavy subsidies in power and food sectors working between Rs 15,000 crore and Rs 18,000 crore.
To begin with, the government will have to shell the interest repayment of Rs 23,000 crore on its borrowings. The Rs 74,000 crore on salaries to employees and Rs 20,000 crore pension is absolutely unavoidable.
Sources in the finance ministry said, “It is a tough call on whether we should focus on financial discipline to arrest the debt at Rs 3.5 lakh crore or loosen our purse to ensure greater investments in infrastructure, agriculture, irrigation and roads.”
The finance minister held wide consultations with cross-sections that resulted in 33,000 suggestions, including ideas on how to mobilise revenue and curtail expenditure.
Sources indicated that emphasis would be to make higher allocations in creating permanent assets, which means bigger allocations in capital expenditure. In the year 2015-16, the total capital expenditure was
Rs 28,074 crore. However, the total Budget spending (Plan and Non-Plan) was Rs 2.3 lakh crore last year. The state plan size was Rs 54,999 crore.
Insiders in the finance department point to marginal increase in both total expenditure and state plan size, which is still being worked out. But gauging the trends, it suggested that the Maharashtra Plan size would be anywhere between Rs 58,000 crore and Rs 60,000 crore.
The decision to tap additional resources through land monetisation continues, its immediate concerns relates to fulfilling all the time-bound projects which it rolled in the last Budget. The revenue department estimate is, the recent land reforms would generate up to Rs 50,000 crore.
At the internal meeting, Fadnavis indicated that when it comes to creating permanent assets, there cannot be any compromise on agriculture and irrigation sectors. The decision to adopt public-private partnership model in agro-industries is also being promoted to override the agrarian crisis in the drought-prone backward regions of Marathwada and Vidarbha.
However, the Food Security Act and concessions in the power sector to farmers will continue. The chief minister’s flagship programme “Jalyukta Shivar Yojna” will be scaled to the next level to mitigate drought in another 5,000
“To ensure better and effective management of funds, Fadnavis at every meeting is stressing on integrated development model,” a senior official in the finance department said.