Maharashtra remains state with highest debt

Maharashtra's debt burden stood at Rs.3.79 lakh crore as on March 31, 2016, the highest among all the Indian states. It is followed by Uttar Pradesh and West Bengal, according to the data compiled by RBI on total outstanding liabilities of state governments.
The state first earned the dubious distinction in 2011 with a debt of Rs.2.30 lakh crore, dislodging Uttar Pradesh (Rs.2.29 lakh crore) that was leading the list of debt ridden states for a long time.The gap between the two has since steadily widened.
Commenting on the cost of establishment, a senior official said Maharashtra's salary burden increased from Rs.22,879 crore in 2007 to Rs.79,941 crore n 2016. The pension payments jumped from Rs.4,682 crore to Rs.24,730 crore in the same period. “Interest burden on loans taken by the state government increased from Rs.12,932 crore in 2007 to Rs.28,220 crore in 2016,“ he said.
Even as the debt burden rises, the cash-starved government will have to shell out another Rs.15,000-20,000 crore for implementation of the Seventh Pay Commission recommendations to 19 lakh odd employees. In 1999, when senior NCP leader Jayant Patil took the reins of the finance department, he had presented a comprehensive white paper on the economy. After blaming the erstwhile Sena-BJP government for the bad finances, Patil had listed a series of measures to reduce the burden. He had declared that stringent steps till be taken to reduce the cost of establishment from 73% to 49%, shut down all non-performing state-run enterprises and corporations, and take a critical review of all on going schemes. The Congress-NCP ruled for 15 years till 2014, but failed to improve the financial crisis.
Last year, finance minister Sudhir Mungantiwar, a senior BJP leader, too presented a white paper on the financial situation and promised stern measures to reduce the debt burden.
“Presenting a white paper is not the answer to tackle the financial situation. In my opinion, we lack the political will to reduce the cost of establishment and wind up loss-making state-run enterprises and corporations. It is high time we stop populist schemes or a day is not far off when we will have to secure loans to pay salaries,'' a senior bureaucrat said.
To begin with, cabinet members must prune their staff. “A cabinet member has a total staff of 15 persons, while a minister of state has 13. We will have to examine if a cabinet member really needs such a large number of employees,'' he said.

No comments: