11.10.11

Maha proposes budget cuts

The Maharashtra government’s finance department is proposing huge cuts in planned and unplanned expenditure for the current fiscal year due to poor revenue gathering across all sectors in 2011-12. Top government officials said the cuts should be effected by November end. For the first time in the recent past, the state would be reducing the plan’s outlay and expenditure on developmental schemes because of poor resource mobilization. Back in 1998, when the Shiv Sena-BJP saffron combine was in power, the finance department had imposed a 30% cut on unplanned expenditure. Maharashtra’s revenue generation has been badly affected by massive hikes in interest rates by nationalized and private banks. Whether sales tax, stamp duty, excise duty, motor vehicles tax or electricity duty, the resource mobilization has been at its lowest when compared to the previous three years. So far as stamp duty and registration are concerned, against the annual target of Rs 15,677 crore, the government collected only Rs 4,986 crore (32%) till August 31, 2011. The excise department mobilized Rs 2,873 crore (34%) against the annual target of Rs 8,500 crore and the motor vehicles department collected Rs 1,496 crore (34%) against the annual target of Rs 4,000 crore. Against a target of Rs 46,000 crore for sales tax, the department was able to mobilize a meagre Rs 21,450 crore by August 31, about 46% of the target. More disturbing is the fact that over 29 developers have dropped plans to set up Special Economic Zones (SEZ) in Maharashtra due to a global economic slowdown.

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