Taking a cue from the Centre, the Maharashtra government has decided to do away with the distinction between plan and non-plan expenditure in its budget for the fiscal 2017-18, Chief Minister Devendra Fadnavis said Wednesday.
The Union Budget this year saw a merging of the general and the railway budget, as well as scrapping of the plan and non-plan categories. Under non-plan expenditure, the government would earmark funds for salaries, subsidies, loans and interest, whereas plan expenditure was allocated for developmental projects and capacity building, areas likely to bring in returns later.
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“The objective of the reform is to curtail wasteful expenditure and inculcate greater fiscal discipline,” said Fadnavis. Fiscal prudence is specially important for Maharashtra, with a whopping Rs 3.25-lakh-crore debt. Fadnavis had discussed the issue with the NITI Aayog during a meeting in Delhi. The Centre formally decided to merge the plan and non-plan expenditures last September.
The matter had been conveyed to state governments. Maharashtra’s budget in 2016-17 was Rs 2.57 lakh crore. At successive meetings in the past two years, Fadnavis’s directive was that the increasing non-plan budget was detrimental for the growth and development of Maharashtra, as it indirectly shrinks capital investments. The state finance department’s projection of capital investment for the year 2016-17 was Rs 32,000 crore. A year ago (2015-16), it was Rs 28,000 crore.The state’s Gross Development Product last year was 8 per cent.
Describing the Centre’s Budget as “path-breaking and addressing concerns of the poor, middle-class and farmers”, Fadnavis said, “Higher allocations in infrastructure, agriculture and housing sectors would lead to inclusive growth.”
Maharashtra has had positive takeaways from the Budget, he said, in the form of increased work on farm ponds — from 5 lakh to 15 lakh — under MGNREGA. The state, which has 24,000 drought-prone villages, has the largest demand from farmers for farm ponds.
In less than a year, the total number of applications for farm ponds in Maharashtra has crossed one lakh and is still rising, the CM said. The decision to include a separate textile policy with employment and investments could work to the state’s advantage in bridging the rural-urban divide, said Fadnavis, whose government has already given its nod to set up 11 textile parks, mainly in Vidarbha, Marathawada and parts of North and Western Maharashtra. The farm-to-fashion policy of the Centre is also being pursued by Maharashtra.
Jaitley’s decision to set up a Rs 5,000-crore corpus fund for micro irrigation has been welcomed by the state.
Fadnavis said, “In Maharashtra, we have declared that water be treated as essential commodity. Drip irrigation, which was confined to 3 lakh hectares of sugar cane crop, is being extended to all crops to double their productivity with lesser investment.”
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