MAHARASHTRA BUDGET 2009-10

STATE BOOKS BERTH ON POLL EXPRESS

FM Rolls Out A Slew Of Sops For Farmers, Lower Income Groups Hoping They Would Return The Favour During Polls

 MAHARASHTRA may be groaning under a mountain of debt, but with elections due in three months, it's the votes that count.
    Maharashtra finance minister Dilip Valse Patil's maiden Budget for 2009-10 rolls out a slew of measures for farmers, lower income groups, tribals and almost every segment which could return the favour during the elections, even as the Economic Survey projects the state's debt to shoot up to Rs 1,58,520 crore in 2008-09, as compared to Rs 97,674 crore in 2003-04.
    Among the measures announced in the Budget are a hefty allocation for the farm debt waiver package, a fresh write-off of loans sanctioned by state-owned welfare corporations, free travel for women representatives of panchayat bodies, a promise to continue the state-sponsored cotton purchase scheme and sops for the sugar industry. There is also a special Rs 11,915-crore package to commemorate Maharashtra's golden jubilee.
    An estimated drop in revenue from some major taxes like sales tax, expenditure on account of populist sops and a steep rise in the wage bill of government employees would result in a budgetary deficit of Rs 1,023 crore in the current fiscal. Mr Valse Patil, however, claimed the government would raise Rs 910 crore through additional resource mobilisation, or an increase in taxes. The revenue deficit for 2009-10 is pegged at Rs 7,123.38 crore.
    The deficit on account of "welfare measures" is sought to be offset by an increase in taxes on electronic goods, motor vehicle tax on four-wheelers, excise duty on Indian Made Foreign Liquor, tobacco products and stamp duty on various instruments. Mr Valse Patil said the increase in tax rates was estimated to earn Rs 910 crore.
    The sops for farmers, minorities, tribals and lowerrung government employees bear in mind the fact that these are sections that participate in elections in larger numbers and the Congress-NCP hopes to reap the benefits of this populist Budget. On the revenue generation side, the budget takes refuge in old tricks like raising taxes on commodities which may not severely impact lowincome groups and the weaker sections.
    All in all, the budget seeks to expand the size of Maharashtra's annual plan for the current fiscal. The state government had presented an interim Budget in March this year which projected the plan outlay at Rs 26,000 crore. The additional Budget presented on Thursday expands the outlay by Rs 11,915 crore, which will be channelled into the golden jubilee commemoration.
    The Rs 26,000-crore annual plan includes Rs 18,534 crore for state-level schemes. The larger allocation of Rs 8,170 crore has been made for the water resources department and the bulk of this is expected to go into pending irrigation projects in Vidarbha and Marathwada.
    In 2008, the government had declared a Rs 6,208-crore farm debt waiver and spent Rs 2,100 crore on the package in the previous year. In the current fiscal, the budget has allocated Rs 2,500 crore for this scheme.
    The Budget 2009-10 reflects the sorry state of Maharashtra's finances, as pointed out by the economic survey, and sets modest targets for the current fiscal.
    Maharashtra expects to generate Rs 50,985 crore through taxes in the current fiscal, which is higher by only around Rs 900 crore than the revised target for 2008-09. This constitutes a sharp fall in the revenue estimates as Maharashtra's Budget for 2008-09 had projected an increase of almost Rs 3,400 crore in tax collection over the 2007-08 figures. The target for sales tax — the biggest source of income for the state —has been pegged at Rs 27,006 crore for the current fiscal, which is lower by almost Rs 1,500 crore compared to the revised target of the previous fiscal.
    The state expects to collect Rs 9,600 crore through stamp duty and registration in 2009-10, which was exactly the budgetary target in the previous year.
    The spend on salaries of government employees, according to the recommendations of the Sixth Pay Commission, is estimated to jump to 34% in the current fiscal from 11.75% in 2008-09.
    Among the major sops is a waiver of debt sanctioned by all state-owned welfare corporations which come under the social justice department. This measure alone will cost the state around Rs 1,100 crore.
ANNOUNCEMENT INCLUDES
Hefty allocation for the farm debt waiver package
Fresh write-off of loans sanctioned by state-owned welfare corporations
Free travel for women representatives of panchayat bodies
A promise to continue the state-sponsored cotton purchase scheme and sops for the sugar industry
A special Rs 11,915-cr package to commemorate Maharashtra's golden jubilee

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