Government staring at `35,000 crore burden

It is caught between public expectation and financial crunch

Latest News
Government staring at `35,000 crore burden


From the ‘Rani of Reforms’, Chief Minister Vasundhara Raje may don the robe of Santa Claus as assembly elections closing in. With 15 months left into her second tenure, she would be under electoral compulsion to try and make every segment of the society happy including government employees.

The most likely fallout of her expected populist measures could be burden of Rs 35,000 crore on the state exchequer. While government employees are expecting bonanza in form of 7th pay commission recommendations; the common man reeling from high oil prices also eagerly awaiting some relief by the state government. Besides, there are demands from farmers particularly hope of a loan waiver up to Rs 50,000.

With high stakes on the assembly elections next year, the state government will have to come true on everyone’s expectation more over those of government employees and farmers. The biggest drain on the exchequer would be 7th pay commission, which is expected to be around Rs 10500 crore but this could increase if the government becomes benevolent and decides to pay arrears from January 1, 2016.

Honouring agreement with farmers would be even bigger burden. If the government waives loan of up to Rs 50,000, the outflow could be anywhere around Rs 20,000 crore. 

Apart from 7th pay commission, the government has to sort out matter of grade pay. For the ministerial employees the finance committee will take a call on grade pay of Rs 3600. Even if there is agreement on grade pay of Rs 2800, the additional chief secretary (Finance) D B Gupta has assessed financial burden of Rs 248 crore though employees claim it would be much lower.

Another grade pay issue is related to recommendation by Govind Sharma committee according to which those receiving grade pay of Rs 1900 to 2100 were to receive Rs 2400 as grade pay while those in Rs 2400 grade pay were to get Rs 2800. After passing through scrutiny of various committees, the currently it is pending with a committee of Transport Minister Yunus Khan. A decision in favour of employees would cost Rs 4800 crore.

However, chief minister who doubles up as finance minister has her task cutout due to revenue deficit. Major reason behind that is falling crude price, which has significantly reduced royalty received from crude oil production in Barmer. Revenue from petroleum has dipped to Rs 1200 crore against estimate of Rs 1300 crore. Besides, the government took burden of Rs 1 lakh crore accumulative losses of three DISCOM’s under ‘UDAY’ scheme. A huge sum is being paid as interest on this. The government also withdrew increased power tariff for agriculture sector taking a hit of Rs 500 crore.

Between heightened expectations and depleted resources, it would be a challenge for the government to strike a fine balance. Although, being a seasoned politician and administrator, the chief would hopefully overcome with ease.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.

Live tv