No new development projects to be taken up in Maharashtra, depts asked to cap spending to 25%

Finance Minister Ajit Pawar has already slashed salaries of ministers and legislators. They will have to brace for a 30 per cent cut. Salaries of government officials have, meanwhile, been staggered.

In another measure, all departments have now been asked to cap spending in the April-June quarter to 25 per cent of the budgeted estimates, prioritising expenditure on committed non-developmental liabilities, including salaries, wages, pensions, rents and taxes, food allowances, other administrative expenses and the servicing of debt. “A prior consent of the finance department will be needed for expenditure on other works,” a senior official said.

At the end of the first phase of the lockdown on April 14, Maharashtra estimated an income loss of Rs 42,000 crore, prompting it to seek a financial assistance of Rs 25,000 crore from the Centre.

In his budget speech for 2020-21, Pawar had said Maharashtra’s total debt would cross Rs 5.20 lakh crore by March 2021, forcing the state to spend a staggering Rs 35,531 crore on servicing it. But with almost no income realised in the last couple of months and the state’s fiscal managers not hopeful of a revival of the economy in the near future, this debt numbers may worsen further.

While Pawar had announced a one-time settlement scheme for crop loan arrears of farmers with land holding above 2 hectare and an incentive scheme for farmers paying loans regularly, the state has decided to defer their implementation for the time being.

Restrictions have also been enforced on grants to local bodies and state-run statutory corporations. “Do not release grants unless their dues pending with the government are recovered. Also, do not release additional grants for a particular work if the amount released previously remained unutilised,” read a notification by the department. Departments have been warned against diverting unspent funds. Development grants won’t be released to local bodies without submission of the utilisation certificates showing previous expenditure.

Meanwhile, Mantralaya saw more footfall on Monday, with the government issuing orders asking departments to ensure that at least 10 per cent of its staff reported to work.