Maharashtra stares at loss of Rs.1.40 lakh-cr

The fallout of the Covid-19 outbreak on the state’s economy has begun to tell. Maharashtra is projected to fall of its 2020-21 revenue target of Rs 3,47,457 crore by 40 per cent, according to a group of experts appointed by the state government.

All commercial activities were halted on March 21, when the state government announced a lockdown. They were allowed to resume, albeit in a restricted manner, only in green and orange zones on April 20.

But the damage had already been done.

According to the group, which was constituted on April 14 by Deputy Chief Minister and Finance Minister Ajit Pawar to suggest a roadmap for the economy’s revival, the state’s coffers will likely get only Rs.2,07,000 crore. Its report, submitted last week to the government, said the state’s decision on May 4 to freeze dearness allowance of government employees from January this year till July 2021 will help it save Rs.12,000 crore.

It recommended increasing the borrowing limit to 5 per cent of the gross state domestic product from 3 per cent, and defer National Small Savings Fund loan repayment by two years to make up partly for the deficit.

The group suggested a “new class of business” to boost the economy—by supporting e-commerce companies, and drawing up favourable policies for entertainment and tourism industries. “An ecosystem to facilitate these businesses must be facilitated,” it said. The ecosystem, it explained, comprised reskilling workers, setting up regulatory frameworks and offering a credit system.

The experts also asked the government to immediately open key revenue sectors, like real estate, infrastructure, transport and excise. The sectors include Metro and road works.

For the agriculture sector, the group recommended seamless movement of produce, proper functioning of agriculture produce market committees, decentralisation of operations and ensuring crop loans and agricultural credit through NABARD funds.

Warning of a crisis in the workforce, it asked the government to persuade the migrant workers who have left the state to return. “Make special arrangements for their transport and ensure proper quarantine and safety measures. Accommodation would need to be provided for workers either at the plant itself, or in hotels, hostels, colleges/ schools with a community kitchen nearby,” the report said. It asserted that all of these can be done while practising social distancing in industrial units.

The group comprised retired IAS officials JS Sahni, Subodh Kumar, Ramanath Jha, Umeshchandra Sarangi, Jayant Kawle and Sudhir Srivastava, and additional chief secretaries from planning and finance departments, and principal secretaries from industries, reforms, finance and agriculture departments.

State Finance Secretary Manoj Saunik refused to comment on the report. “It is under consideration,” he said. The report is expected to be placed before the cabinet at the next meeting.

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