The Maharashtra government wants the Centre to pitch in with at least 20 per cent of the funds it would require to improve the infrastructure and the quality of life in the commercial capital over the next five years.
Underscoring Mumbai’s importance as the country’s commercial and economic capital, it has decided to seek a “special package” for the city’s infrastructure concerns.
Senior sources confirmed that the state government will seek a special grant of Rs 50,000 crore for the Mumbai Metropolitan Region, when it submits its memorandum of demands to the Centre’s 15th Finance Commission on September 19.
The Commission, which is headed by former bureaucrat N K Singh, arrived in Mumbai for consultations on Monday. While the commission members held discussions with the Reserve Bank of India officials on Monday, consultations with representatives of various political parties and trade unions are scheduled on Tuesday. On Wednesday, the Devendra Fadnavis-led government will formally submit its memorandum to the Commission.
Besides a special status for Mumbai, the state government will also seek special grants to the tune of Rs 25,000 crore over five years for development works in the backward regions of Marathwada and Vidarbha. While Maharashtra contributes almost 15 per cent to the country’s Gross Domestic Product, the state government has contended that there are over ten districts in the state whose net per capita domestic product was below the national average.
Reiterating a demand it had made during consultations held by the previous Finance Commission, the state will also seek a higher share of devolutions from the divisible pool on grounds of its fiscal efficiency and the size of the economy. “We will basically seek a revision of weighted parameters used to determine the size of the devolutions,” a source said.
Showcasing the property tax collections and reforms carried out by local bodies in the state, the government will further seek enhancement of annual grants for Panchayati Raj Institutions and municipalities. It has decided to push the Centre to also consider “capital investment” required to meet minimum benchmarks in such local bodies apart from costs for “operation and maintainance”. Special grants will also be sought for river beautification projects, improvement of green cover, construction of anganwadis, and improvement of policing infrastructure, among others.
Contending that states taking a lead in promoting environment must be rewarded, the government is also likely to push for a “green bonus” for such states, while highlighting also the measures it has been taking to improve the forest and the mangrove cover in Maharashtra. It will also pitch for compensation to states for losses due to the reduction in the overall size of the divisible pool.
While Maharashtra is a front runner in terms of fiscal management in India and its overall fiscal deficit remains well within the limit of 3 per cent of its Gross State Domestic Product (GSDP), the state government is wary of being pulled up by the Commission for a worrying revenue deficit-to-GSDP ratio, which has consistently increased in the past few years.
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