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Cess, surcharge, land lease to ease burden

The government has already formed a high-level committee headed by DK Jain, Finance Secretary, to suggest various options to mobilise the funds

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Sudhir Mungantiwar
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Notwithstanding the public debt, which is expected to cross Rs 4 lakh crore by the end of the current fiscal, the Maharashtra government hopes to mop up necessary funds for the implementation of a slew of populist schemes including the construction of memorials of Chhatrapati Shivaji, Dr Ambedkar and Bal Thackeray, crop loan waiver worth Rs 30,000 crore and a closure of more than 60 toll plazas.

The government has already formed a high-level committee headed by DK Jain, Finance Secretary, to suggest various options to mobilise the funds. The instruments may include demonetising government lands by selling them, giving them out on lease, or by providing development rights. Apart from these, measures such as the issuance of bonds, raising loans and imposition of cess, etc can be taken up. Additionally, the government expects to get more funds due to an increase in the state's share from 32 per cent to 42 per cent under the devolution of funds from the Centre, following the implementation of the 14th Finance Commission.

Finance Minister Sudhir Mungantiwar has already said that the debt of Rs 3.56 lakh crore as on March 31, 2016-17 was 15.7 per cent of the gross state domestic product (GSDP), which is well within the 22.1 per cent limit laid down by the 14th Finance Commission. He argued that this also allows the state to raise more debt to finance these schemes and other development works. Further, he hinted that the government will launch an extensive austerity drive to curb its expenses.

However, the government still faces a huge challenge to maintain fiscal prudence as it implements the 7th Pay Commission to the tune of Rs 24,000 crore, along with an additional annual burden of Rs 1.04 lakh crore towards salaries and wages, and interest payment of Rs 28, 220 crore. The government has also projected a revenue deficit of Rs 4,511 crore by the end of 2017-18.

The closure of permit rooms and bars due to the Supreme Court order will lead to a fall in the excise duty collection. Recently, the state government increased the surcharge on petrol by Rs 3 per litre to gather Rs 1,000 crore, which will be used for agricultural development.

Moreover, the government had mobilised Rs 1,300 crore through cess levied on petrol and diesel between October 2015 and March 2016. The government may go in for more cess, surcharge to raise money.

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