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Friday, October 23, 2020

Maharashtra: Investment in social infra makes up for 35% of govt’s expenditure plan

For 2020-21, the government has budgeted for a total expenditure ofRs 4.34 lakh crore, which works out to be Rs 17,163 crore or 4 per cent higher than the expenditure of Rs 4.17 lakh crore incurred this fiscal.

Written by Sandeep A Ashar | Mumbai | Updated: March 21, 2020 10:20:18 am
Uddhav Thackeray,Maharashtra govt, maharashtra social sector, maharashtra social sector boost, maharashtra public sector, maharashtra Water Conservation Scheme, Maharashtra Cheif Minister Uddhav Thackeray. (File)

MAHARASHTRA’s social sector has received a boost in the Uddhav Thackeray-led coalition’s maiden Budget. While spelling out its spend plan for 2020-21 on March 6, the government has significantly enhanced social sector allocations, earmarking a high proportion of its resources for the sector.

For 2020-21, the government has budgeted for a total expenditure ofRs 4.34 lakh crore, which works out to be Rs 17,163 crore or 4 per cent higher than the expenditure of Rs 4.17 lakh crore incurred this fiscal. Of this, it has earmarked Rs 153,237 lakh crore or 35 per cent for development works in the social sector.

In absolute terms, the public sector investment in the social sector is projected to jump by an additional Rs 10603 crore or roughly 7 per cent as compared to the revised estimate of Rs 1,43,634 lakh crore in 2019-20. On the other hand, the total expenditure on economic services will decline by Rs 6545 crore — from Rs 74756 crore in 2019-20 to Rs 68211 crore in 2020-21 — or by nearly 9 per cent.

A deeper look at the Budget documents reveal that within the social sector, the government appears to be focussed on improvement in water supply and sanitation facilities, and provision of basic urban amenities and housing, with an 35 per cent enhanced allocation — from Rs 21144 crore (2019-20) to Rs 28619 crore (2020-21) for these activities.

An outlay of Rs 450 crore has been earmarked for the ‘Chief Minister Water Conservation Scheme’ for the rejuvenatuion of 8000 inoperational water supply schemes for creating more decentralised water storage structures.

Similarly, an additional allocation of Rs 6371 crore has also been made for the education, sports, art and culture activities, while a 15 per cent growth in expenditure on various welfare measures meant for the Scheduled Castes, Scheduled Tribes, Other Backward Classes and minorities has been budgeted for.

“Maharashtra is a welfare state, and thus has a growing expenditure committment to spending in the social sector. Efforts are being made towards redirecting expenditure awat from less productive schemes towards improvement of quality of life of people by strenghthening social sector,” said Finance Minister Ajit Pawar, while spelling out the state’s expenditure policy for 2020-21.

The government has set aside Rs 1300 crore for upgrading 12 government-run engineering colleges in centres of excellence, and budgetted for transforming four schools in every district into “model” institutions.

It has also announced plans to launch a new Maharashtra Apprenticeship Scheme from August 15, where a financial assistance of Rs 5000 will be offered to establishments enrolled youth as apprentices, targetting to create employment opportunities for 10 lakh youngsters this way in the coming five years. Further, it has earmarked Rs 130 crore in 2021-21 for skill training and self employment through the ‘Chief Minister’s Employment Generation Scheme’.

“A high proportion of the resources will go to the social sector. In times of economic downturn, the state government believes that investing more in social infrastructure will boost productivity and consequently raise growth,” a senior official said.

Incidentally, the expenditure on nutrition and social security schemes has been slashed in the new Budget from Rs 22329 crore as per revised estimates of 2019-20 to Rs 15152 crore. But a senior finance department official argued that the expenditure under this head had shot up abnormally in 2019-20 due to the Lok Sabha and Assembly elections.

In many ways, the Uddhav-led coalition’s expenditure policy has deviated from the policy adopted when the previous BJP-led regime was in power in the state. In line with the Centre’s development mode, the Devendra Fadnavis government had prioritised infrastructure spending and invested substantially in activities and services meant for economic growth.

“The previous regime believed that only a focus on growth could yield the resources needed for investing in the social sector schemes,” an official said. He, however, added, “It is another matter that widespread rural and agrarian distress, brought on by back-to-back drought spells and crop losses due to unseasonal rains, had forced even the previous regime to increase social sector allocations in the last couple of years.”

But statistics show that to meet fiscal deficit targets, the previous regime had slashed expenditure on education, water supply and sanitation, rural development, among other social services.

For instance, in 2019-20, the total spend on education, sports, art and culture has declined from the budgetted Rs 71207 crore to Rs 66530 crore — a 6.5 per cent drop. Similarly, the actual expenditure on rural development was Rs 12585 crore in the same year against a budgetted target of Rs 16095 crore.

The Fadnavis government was in power in Maharashtra from October 30, 2014 to November 12, 2019. In some ways, the Uddhav coalition’s maiden Budget draws from the AAP-led Delhi government’s model of governance, which has focussed on prioritising social sector spending.

While recounting the tough economic challenges ahead, Pawar, in his Budget speech, had said: “In spite of the economic downturn in the country, the burden of the debt on the state, non-availability of the expected funds on time from the central government, limited available resources and compliance of financial discipline, it is the responsibility of the government to fulfill the reasonable expectations of farmers, women, youths and all sections of the society.”

However, the added focus on social sector spending also meant on the allocations for development spend from the revenue account on agriculture and related activities, the power sector, and industries will come down as compared to this year.

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