Surplus estimate ends as 2,059cr deficit

The Maharashtra government's budget estimate for the current fiscal year missed its mark by a mile. While presenting the 2011-2012 budget last year, it had predicted a revenue surplus of Rs 58.21 crore. But five days before the end of the fiscal year, finance minister Ajit Pawar admitted to legislators that the state now anticipated a revenue deficit of about Rs 2,058.71 crore in 2011-12. The overall fiscal deficit (which includes capital account and borrowings and other liabilities) too was revised from the originally anticipated Rs 678.37 crore to Rs 1,325.34 crore. 

    The admission of the poor financial performance and the slowdown in the economy made political observers wonder if the positive picture painted for the coming fiscal year will also prove illusory. Based on the guidelines of the 13th finance commission, the government has estimated a revenue surplus of Rs 152.49 crore in 2012-13 and an overall fiscal deficit of Rs 1,159.69 crore. It has also estimated the revenue income to rise from Rs 1,25,312 crore in 2011-12 to Rs 1,36,712 crore in 2012-13. Observers however doubt that a rise of about 10% in revenue income can be realized. 

    The financial statement tabled by Pawar on Monday shows where the figures fell short of the state's expectations in 2011-12. In at least nine of the 26 revenue earnings heads, set targets could not be met. With the real estate market remaining sluggish, the stamp and registration department's revenue missed the estimated figure by Rs 1,676 crore—it was expected to generate Rs 15,677.14 crore but ended up collecting Rs 14,000.88 crore. 

    The revenue side also suffered on account of non-receipt of 1,120 crore from the Centre as assistance for housing and urban development projects under the Jawaharlal Nehru National Urban Renewal Mission. While the state expected 

Rs 8,077 crore as central funding for such projects, the Union government released only Rs 6,957 crore. Due to non-realisation of income through sale of FSI, another Rs 708 crore could not be collected. High liquor prices meant that the excise department fell short of its target by Rs 254 cr. 

    The saving grace was the sales tax department, which not only met its target but also collected about 9% extra. Against a target of Rs 46,000 crore, the department is anticipated to collect Rs 50,000 crore. Pawar attributed the boon to the computerization and modernization of the department and drives against hawala operators. Increase of grant-in-aid for Union government-sponsored schemes also aided the state treasury. 

    Pawar said that additional financial burden—including a Rs 2,000 crore assistance package for cotton, soya bean and paddy farmers, and increased subsidies and grants in the agriculture sector and industry—led to a 4% rise in expenditure. By casting a wider tax net, Pawar plans to mop up an additional Rs 600 crore in 2012-13. While chief minister Prithviraj Chavan praised Pawar for tabling a "balanced budget", opposition leader Eknath Khadse dismissed it. He alleged that the state treasury was bankrupt and the state was being run on funds received from the Centre.