Days before restrictions due to COVID-19 pandemic were first imposed in Maharashtra, the Uddhav Thackeray-led coalition in the state had announced a plan to build 40,000 kilometres of rural roads. On March 6, state Finance Minister Ajit Pawar, presenting the coalition’s first Budget, had earmarked Rs 1,501 crore for the ambitious scheme in 2020-21.
By March 14, as Maharashtra reported its earliest cases of the coronavirus from Pune and Mumbai, the state government started to shut economic activities to avoid the spread of the virus. Ten days later, the Prime Minister announced a nationwide lockdown.
While the Budget was approved, the ambitious scheme remained just an announcement on paper.
On May 3, with the country still in lockdown and the state now the epicentre of the outbreak, state Chief Secretary Ajoy Mehta issued orders announcing a 100 per cent freeze on new capital works citing the hefty loss of income suffered by the government’s treasury. In perhaps the deepest expenditure cutback in the state’s history, Mehta also capped the total scheme expenditure for 2020-21 to just 33 per cent of Rs 1.15 lakh crore budgeted for it. Even among ongoing development schemes, departments have been asked to take up only those that are unavoidable.
Given the curb in spending, senior state officials admitted that the Rural Road Development Scheme (RRDS), also labelled Mukhyamantri Gram Sadak Yojana, has now been put on a backburner.
With an eye on the urban body polls in 2022, the state government had also set aside Rs 1,000 crore in 2020-21 for a parallel Urban Road Development Scheme, aimed at financially assisting the municipalities and local road development agencies to repair and re-lay city roads, including those in the financial capital. Like in the case of the rural scheme, while the legislature approved the budgetary provision, the government resolution has not been issued.
“The chief secretary’s orders are clear cut. All construction works that are yet to be accorded technical or administrative approval have been stayed till further orders. This urban scheme also falls in this category,” said another senior official.
In the budget estimated, the state had earlier earmarked Rs 47,417 crore, collectively, for ongoing and new capital works, which was barely 10.4 per cent of the total spend estimates (Rs 4.35 lakh crore), and Rs 2,046 crore lower than the capital spend in 2019-20. The losses due to the coronavirus lockdown have only worsened the scenario further, the official said.
Mehta’s order makes it clear that all new works, except “operational expenses” for COVID-19 control measures, are stayed for now. Till the time the curbs are lifted, only five departments — Public Health, Medical Education, Food and Drug Administration, Food and Civil Supplies, and Relief and Rehabilitation — have been authorised to make purchases or commit to new expenditure. Departments have been asked to prioritise spend on committed liabilities. “Restrictions will apply to decisions taken bythe Cabinet before March 2020,”the order states. Incidentally, the curbs will likely also cast a spell on Ajit Pawar’s own pet project — a 170-km-long ring road to decongest traffic in Pune.
Meanwhile, Maharashtra State Road Development Corporation (MSRDC) officials said the plan to construct a 500-km-long coastal highway, connecting Navi Mumbai to Konkan, was still in planning stages.
Agencies involved in the implementation of big-ticket infrastructure projects in Mumbai, Pune, and Nagpur said the expenditure cut won’t directly impact the projects. Ranjit Singh Deol, managing director of Mumbai Metro Rail Corporation Limited, which is currently building the Colaba-Bandra-Seepz underground Metro route, said, “We’re studying the impact of the cut. But the project is mainly funding through off-budget borrowings.”
A senior official with the Mumbai Metropolitan Road Development Authority (MMRDA), which is the nodal agency for the other Metro rail routes, concurred. Radheshyam Mopalwar, managing director, MSRDC, felt the same about the 700-km-long Mumbai-Nagpur Samruddhi Corridor Project. “The project won’t be affected,” he maintained.
Earlier this year, the state government had committed to make a capital investment of Rs 3,500 crore in the project, also mainly financed by a consortium of lenders. “We may only need to roll back the infusion of the state’s share,” he added. A finance department official, however, pointed out the government had issued guarantees to secure loans for all these projects.
On Wednesday, the Congress also demanded a special revival package for tourism projects. “Tourism projects have been adversely hit due to the lockdown. I’ve requested (Tourism Minister) Aaditya Thackeray ji to consider a special package to rescue the sector,” said state Youth Congress president Satyajeet Tambe. Plan to build a world-class aquarium in the commercial capital, promoted by Aditya himself, has also been hit.
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