Mumbai: Maharashtra, one of India’s top states in terms of Gross State Domestic Product (GSDP), has ruled out a switch to January-December financial year for now.

Maharashtra’s finance minister Sudhir Mungantiwar told Mint on Wednesday that the state had no plans to follow Madhya Pradesh, which on Tuesday became the first Indian state to move to the January-December fiscal year.

While Madhya Pradesh is ruled by the Bharatiya Janata Party (BJP), Maharashtra is ruled by a BJP-led coalition. Mungantiwar said Maharashtra would not switch to a January-December financial year until and unless the Centre did so.

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Mungantiwar, however, added that the state would immediately make the switch if the Centre moves to a new fiscal calendar. “We were the first state to club planned and non-plan expenditure after the Centre announced it. We will follow the Centre in making this switch too," Mungantiwar clarified.

“Shifting a big economy like Maharashtra to January-December financial year before the Centre has done so would lead to lot of budgetary chaos. We have no plans to do this till the Centre does that," Mungantiwar said.

The Shivraj Singh Chouhan government in Madhya Pradesh decided to make such a shift after Prime Minister Narendra Modi last month suggested at Niti Aayog’s governing council meeting that states should take the lead in changing the financial year to January-December.

Mungantiwar, a senior BJP leader, argued that the current system of following April to March financial year worked well for the state because the Centre was still following that model. “The Centre presents the Union budget in February. The states follow it by making their own budgets in late February or March. This gap between the Union budget and the state budget is significant because it gives us leads on what the Centre is thinking, what are the budget priorities, what are the allocations, and what are the different heads under which allocations have been made. The state’s budgetary preparations take a cue from the Union budget," Mungantiwar said.

He said several centrally-sponsored schemes are mentioned in the Union budget along with the allocations. He added the state needed to know beforehand its share in the central grants. “These details are in the Union budget and they serve as leading points for us to make our own budgets. I cannot draft Maharashtra’s budget estimates unless I know beforehand the share Maharashtra will get in central grants and allocations," he said.

“After the schemes are budgeted by the Centre, the states get their share of central money for those schemes. Then the states have to make matching allocations in their budgets. For instance, if the Union budget says the Centre will bear 60% of the cost of a particular scheme, the state has to allocate 40%. I cannot go ahead and make my budget estimates on assumptions about allocations," he said. The Maharashtra finance minister, who presented the state budget for 2017-18 on 18 March, said the budgetary exercise of both the Centre and the state had to be in harmony with each other so that the allocations made under different heads are “consistent and achievable".

“The Modi government has made budget a very serious exercise with clear priorities and targets. Unless the states learn from these priorities and make their budgets accordingly, the desired results would not be achieved," Mungantiwar said.