Mumbai: Maharashtra will grow at an estimated 7.3% in 2017-18, slower than the 10% achieved in 2016-17, finance minister Sudhir Mungantiwar said, ahead of his fourth budget on Friday.
He sought to quell doubts over the state of Maharashtra’s economy in a pre-budget press conference on Thursday after he tabled the state’s economic survey for 2017-18.
“I would like to tell the critics and sceptics who are worried about the state of Maharashtra’s economy that the state has been performing well on all economic indicators and indices. In the last three years, we have put the economy on a trajectory of balanced growth,” Mungantiwar said.
Attributing the 8.3% dip in farm sector growth to below normal rain, Mungantiwar listed out the Bharatiya Janata Party-led government’s achievements on other economic fronts. In 2017-18, the per capita income of Maharashtra is estimated to rise to Rs180,596 as against Rs165,491 in the previous fiscal. “Maharashtra is leading among the major states on this front. Three years back when we had just taken over, Karnataka had a higher per capita income but in 2017-18 we are leaving even Karnataka behind,” he said.
The state estimates revenue receipts of Rs2.44 trillion in the current fiscal. The actual revenue receipts from April to December 2017 came in at Rs1.66 trillion, which represented an increase of 17.8% over the actual revenue income from April to December 2016, Mungantiwar said.
The revenue deficit, fiscal deficit and debt stock are estimated at Rs4,511 crore, Rs38,789 crore and Rs4.13 trillion, respectively, according to the 2017-18 budget estimates.
Mungantiwar said the percentage of fiscal deficit to gross state domestic product (GSDP) was estimated to be 1.6% and debt stock to GSDP 16.6%. “Much is being made of the debt burden on the state but the percentage of debt stock to GSDP is only 16.6%, which is way below the fiscal limit of 22.2% stipulated under the consolidated fiscal reforms path. In 2011-12, Maharashtra’s percentage of debt to GSDP was 17.6 and the 2017-18 budget targeted to bring it down to 16.3%. But we had to account for a 0.3% increase on account of the farm loan waiver for which we have had to raise debt,” he said.
Mungantiwar reminded the Congress and Nationalist Congress Party that during their rule in 2005-06, Maharashtra’s debt to GSDP percentage was 25.5%. “Today, Maharashtra has a lower debt to GSDP percentage than Gujarat which is 16.83% and Karnataka at 17.9%. Maharashtra’s fiscal deficit of 1.6% also fares well as compared to Gujarat (1.82%), Tamil Nadu (2.8%), and Karnataka (2.6%), he pointed out.
“The debt situation in Maharashtra is totally under control. This is borne out by another yardstick of the percentage of interest on debt to revenue receipts. In 2005-06, it was 19.27% and 17.7% in 2009-10. In 2017-18, we have brought it down to 12.73%. This is 16.3% for Tamil Nadu and 13.3% in Gujarat,” he said.
Mungantiwar, however, said Maharashtra needed to take steps like Gujarat, Madhya Pradesh, and Karnataka to ensure revenue expenditure is less than revenue receipts.
Reacting to the opposition criticism that the state was under a mountain of debt, Mungantiwar said even developed countries were raising debt to augment capital investments in their economies. “India’s debt to GDP percentage was 67.5% in 2010 and it has remained nearly the same since then. For Japan, this is 240% and Singapore 110%. World over, debt is raised to make capital investment in economy,” he said.
Compared to the previous Congress-NCP government, the BJP-led government was deploying the debt into asset creation, he said. “For instance, we have raised a debt of Rs4,595 crore for Uday scheme for Maha discom, Rs12,000 crore through Nabard to complete long-pending irrigation projects, and stood guarantee for a Rs15,100 crore debt raised for Mumbai trans-harbour link project. We have raised debt for metro projects that would add 234.5 km of metro network in Maharashtra worth more than Rs1 trillion. We have deployed debt to raise the irrigation coverage of the state from 50,000 hectares per year during the Congress-NCP rule to 1 lakh hectares per year. These are capital investments for long-term asset creation and helping Maharashtra become a trillion-dollar economy,” Mungantiwar said.