Even though Maharashtra is a premier state in terms of gross state domestic product (GSDP), it continues to face four major challenges — rain-fed agriculture compounded by climate change, balanced regional development, fast-growing urbanization and management of increasing revenue deficit. Besides, there has been a slow down in industrial growth between 2015-16 and 2017-18 due to dip in mining and quarry sector, electricity, gas, water supply, and other utility services.
The share of capital expenditure has almost halved to 11% per cent in 2018-19 from 24 per cent in 2008-09 because of substantial grants made available to urban local bodies and panchayat raj institutions. Even though this expenditure is reflected in the state government's accounts as revenue expenditure, it does not result in the creation of capital assets in Maharashtra.
Apart from this, the share of total receipts compared to gross state domestic product (GSDP) has been on a declining trend and it has come down to 12.3 per cent in 2017-18 from 14.9 per cent in 2005-06. The growth in receipts has not kept pace with the economic growth of the state because the tax on services was under the ambit of the central government.
These concerns were highlighted by the state chief minister Devendra Fadnavis in his presentation to the 15th Finance Commission (FC) headed by former revenue secretary NK Singh.
Fadnavis however, hoped that the state government will be in a position to turn around with increased allocation of resources from the FC and a slew of steps taken by it to deal with the situation. "With the increased support from the central government, the state will be able to achieve trillion dollar economy assuming a growth of 12 per cent in gross state domestic product by 2024-25," he noted.
Fadnavis further stated that the FC needs to give weight to new parameters like urbanization, fiscal efficiency, and green cover while devoluting funds. "The changing economic and population profile of Maharashtra needs to be appropriately factored in any pattern of devolution. The state will have to be incentivised adhering to the generally accepted fiscal deficit norm,'' he said.
Fadnavis insisted that Maharashtra needs to be incentivised for taking steps in increasing tree cover, especially in non-forested lands. ''The government has proposed weightage of 2.5 per cent for this purpose,'' he noted.
Chief Minister said Maharashtra has a skewed with Mumbai's per capita income distorting the average per capita income of the state and as a result, the state has received lesser funds. "The government has urged the FC to cut the abnormally high weightage given to the income distance criteria by the earlier FCs. The government has proposed weightage of not more than 15 per cent for this criterion in its current form.
SHARP DECLINE
- There has been a slow down in industrial growth between 2015-16 and 2017-18 due to dip in mining and quarry sector, electricity, gas, water supply, and other utility services.
- The share of capital expenditure has almost halved to 11 per cent in 2018-19 from 24 per cent in 2008-09 because of substantial grants made available to urban local bodies and panchayati raj institutions
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