The Maharashtra government on Wednesday avoided the temptations of pre-poll populism and presented an interim budget with an estimated revenue deficit of ₹19,784 crore. The interim budget estimates a revenue income of ₹3,14,489 crore and expenditure of ₹3,34,273 crore in 2019-20.
State finance minister Sudhir Mungantiwar attributed the deficit to the impact of the implementation of the recommendations of the 7th Pay Commission for state government employees.
Lok Sabha elections are due to be held in April-May and Maharashtra is due for assembly polls around October. Mungantiwar’s budget, however, avoided farmer-friendly sops on the lines of the interim budget announced by the Narendra Modi-led National Democratic Alliance government earlier this month.
Despite the revenue deficit, Mungantiwar said the state finances were in a “healthy condition" and the fundamentals were strong. He sought to dispel the opposition’s fears that Maharashtra was hurtling down the debt trap and said the “evaluation of the state’s financial position has to be made scientifically and on the basis of facts and figures".
The 2018-19 budget estimated that the state’s total debt would reach ₹4,61,807 crore, which meant that an additional loan of ₹54,996 crore had to be taken in 2018-19, said the Maharashtra finance minister.
“However, because of conscious efforts taken this year, we have been able to restrict the loan to ₹11,990 crore only. Therefore, the amount of total debt of the state has increased to ₹4,14,411 crore," he said.
The quantum of debt is reasonable, given the size of the state’s economy, Mungantiwar argued. “As per the fiscal benchmarks and parameters, the financial condition of a state economy is considered healthy if the percentage of debt is less than 25% of the GSDP (gross state domestic product). The percentage of debt in the GSDP is only 14.82% in Maharashtra, which means we have a healthy economy," he said.
Maharashtra has been exceeding its revenue receipt target every year even after factoring in the implementation of the goods and services tax (GST), Mungantiwar said.
Maharashtra set a budgetary target of ₹90,000 crore revenue but collected ₹1,15,000 crore in 2017-18, the first year after GST was implemented, he said. The 2018-19 budget estimated revenue income of ₹2,85,968 crore but the state had collected ₹2,86,500 crore, he said. However, revenue expenditure of ₹3,01,460 crore in 2018-19 led to the revenue deficit of ₹14,960 crore, he said.
The budget has so far sanctioned ₹24,000 crore for nearly 5.1 million farmers under the ₹34,022 crore farm loan waiver scheme announced in June 2017, the finance minister said.