Maharashtra government’s annual wage bill doubles in 8 yrs

At Rs 25,911 crore, the amount is over 1.98 times higher than the bill of Rs 13,024 crore in 2009-10.

Written by Sandeep A Ashar | Mumbai | Published:March 16, 2017 3:30 am

THE Maharashtra government’s annual salary bill ballooned almost two-fold in the last eight years to reach Rs 25,911 crore, official figures revealed Wednesday. Also, the sharp increase has coincided with a shrinking share of capital expenditure (capex) in the overall spend. According to the government’s data, the state’s capex as a percentage of total expenditure has fallen from 17.2 per cent in 2009-10 to 11 per cent in 2016-17.

On Wednesday, state’s fiscal managers admitted that an increase in revenue expenditure without proportionate growth in income and capex numbers was worrying. The Devendra Fadnavis government is scheduled to table the state’s budget for 2017-18 on March 18.

According to the numbers put out by the state’s live budget monitoring website, referred to as Budget Estimation, Allocation, and Monitoring System (BEAMS), an amount of Rs 25,911 crore has so far been utilised towards monthly salaries of government employees. The figures refer to spend up to March 15, 2017. This is over 1.98 times higher than the annual wage bill of Rs 13,024 crore in 2009-10.

Of the Rs 1.88 lakh crore spent from the government kitty in 2016-17, official figures further show that the revenue expenditure alone has accounted for Rs 1.55 lakh crore or roughly 82 per cent of the total spending. Though the government has allocated Rs 31,006 crore for capex this year, it has so far spent just Rs 21,024 crore, the figures further show.

Besides salaries of government staff, a hike in salary grants to aided institutions — this has risen from Rs 29,885 crore in 2009-10 to Rs 42,446 crore now — and pensionary benefits also contributed to the increased revenue expenditure, a senior state official conceded.

Ironically, in April 2015, the Fadnavis government had released a white paper on the health of the state’s economy, where it had blamed the previous Congress-Nationalist Congress Party regime for an “unjustified” increase in revenue expenditure and misdirected subsidies while promising fiscal consolidation. Through the white paper, his government had promised that it would “restore the balance of the state’s economy” by reining in revenue expenditure, mobilising additional income sources, and boosting spend on capital expenditure.

While reading out his budget speech for 2016-17 last March, Finance Minister Sudhir Mungantiwar had listed plans for “minimising fiscal and revenue deficit numbers through savings by reducing wasteful expenditure and effective revenue recoveries”. Among other reforms, the government had announced that it would plug leakages in subsidies and re-engineer the government’s business processing model to rein in revenue expenditure. Sources admitted that these reforms were yet to see the light of day.

With local body polls held across the state in 2016-17, salary grants to aided institutions affiliated with the school education department, the rural development department, and the social justice department witnessed a rise.

Senior officials also admitted to the concern that the wage bill would only rise further with recommendations of the Seventh Pay Commission expected to be implemented in the near future. “This will translate into an additional burden of Rs 15,000 crore,” said a senior official. A farm loan waiver, if accepted, will dig an even bigger hole in the state’s exchequer.

When contacted, Mungantiwar said, “We have curbed wasteful expenditure a great deal by streamlining the government’s purchase policy. Leakages in subsidies have been curbed to a great extent through direct transfer in the bank account of beneficiaries. There is a lot more which will be done this year.” He added that the spending in capital works in the irrigation and agriculture sectors in 2016-17 had led to economic growth.

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