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Maya freebies the final blow to state’s finances

The freebies worth Rs 2,750 crore which Chief Minister Mayawati announced on her birthday came at a time when the state’s finances are already under severe strain due to revenue shortfalls.

The freebies worth Rs 2,750 crore which Chief Minister Mayawati announced on her birthday came at a time when the state’s finances are already under severe strain due to revenue shortfalls. An additional burden of over Rs 15,000 crore has also been incurred following the state’s decision to extend the Sixth Pay Commission benefits to its employees.

Government sources say there has been a shortfall of Rs 1,800 crore in tax collection in the first nine months of the current fiscal. For 2008-09,the government had fixed a target of realising Rs 33,813 crore from commercial tax,stamps and registration,transport and excise. Sources say that the current trends indicate a big shortfall in the year.

The adverse impact on the availability of resources is also evident from the fact that in 2008-09,against a provision of Rs 55,642 crore in the budget for developmental works,the government could mobilise only Rs 22,000 crore by December-end. Still the chief minister has announced fixed deposits of Rs 20,000 for poor girls,Rs 25,000 each to girls studying in class XI and XII,and land ownership rights to squatters on government lands.

The finance department sources said tough days are ahead for the state as from the next fiscal 2009-10,the government will have to bear an additional burden of Rs 11,000 crore in one year with no source of additional revenue in sight.

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The UP government’s desperation to tide over the crisis is evident from the fact that on December 29,as many as 11 departments were asked to surrender Rs 937 crore lying in the personal ledger account (PLA) since 2006-07. According to the records of the finance department,over Rs 3,000 crore were parked in the PLA by the end of December.

Earlier,Mayawati,while announcing the implementation of the Sixth Pay Commission,had announced to cut down the non-plan expenditure by five per cent and budgetary provisions of Rs 1,115 crore were frozen.

In September last year,VAT and entry tax on several items was hiked to fetch additional revenue of Rs 100 crore per month. The government had also decided to ban the purchase of new vehicles,and all departments were directed to reduce the size of their fleet of vehicles by five percent by next financial year.

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These measures,however,will serve only as palliatives,given the magnitude of the problem of the crisis.

In spite of these facts,Prinicipal Secretary (Finance) Anoop Mishra claims: “The Fiscal situation of UP is ok and contrary to popular perception of fiscal stress due to rising expenditure we are doing fine and we will tide over the situation with better management of the expenditure.”

First published on: 16-01-2009 at 02:38:47 am
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