MAHARASHTRA, the state worst-hit by the Covid-19 pandemic in the country, Monday declared a freeze on new capital works till March next year.
The state, whose Budget size is the second biggest after Uttar Pradesh, imposed a 67 per cent cut in development (scheme) spend for 2020-21. “This is the deepest ever cut in expenditure since the state was formed in 1960,” an official said.
Objecting to development funds lying unspent with departments or such corporations, Mehta asked the finance department not to release new grants till these are either surrendered or utilised.
The austerity drive has cast a shadow on the state’s farm loan waiver scheme. While the implementation of the first scheme — where loan arrears between April 2015 and March 2019, totalling Rs 2 lakh, were waived — has been stalled midway, a new one-time settlement scheme for farmers with arrears over Rs 2 lakh and another incentive scheme for regular farm loan payers, both announced by Pawar in his Budget speech, are yet to take off.
Further, departments have been asked to cap administrative expenses at 75 per cent of the budgeted amount, with restrictions announced for expenditure on office renovation, stationery, consultancies, and rents among others. Departments have been asked to prioritise spending on committed non-developmental liabilities, including salaries, wages, pensions, and servicing of debt.