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Wednesday, July 15, 1998

Maharashtra plan to cut expenses

Prafulla Marpakwar  
MUMBAI, July 14: The Maharashtra Government has decided to trim the fat and buckle up on expenses by preparing an umbrella plan to maintain financial discipline. Among a series of austerity measures, the cash-starved government will impose a 10 per cent cut on non-plan expenditure to mobilise an additional Rs 2,000 crore for on-going developmental schemes.

A ban on recruitment of temporary staff by all departments, restrictions on use of vehicles and tours of officials, a cut in telephone bills and allowances and a ban on renovation and repair of government bungalows are some of the measures included in a plan submitted by state Finance and Planning Minister Mahadev Rao Shivankar to Chief Minister Manohar Joshi. The plan aims to bail out the government from the resource crunch and to stem criticism for its failure to curb expenditure. However, Shivankar told The Indian Express that was no resource crunch. ``We plan to cut non-plan expenditure to garner additional funds for development projects.

Meanwhile,in a paralle move the government today announced an increase in the water cess for irrigation and industrial usage from Rs 1,750 per hectare to Rs 2,625. The exercise would fetch Rs 80 crore in additional revenue.

The State Government's problems stem from the fact that it has the dole out substantial amount as and when the salary revision is made as per the Fifth Pay Commission. On Saturday, the Planning Commission had asked all the states to make their own budgetary provisions to implement the Pay Commission's recomendations and that they should not depend on financial asistance from the Centre for the purpose.

It remains to be seen whether these cuts and austerity measures work as in 1995-96, the Government had imposed a 20-per cent cut in its main departments - Sales Tax and Excise but had failed to achieve their targets.A senior BJP minister said the alliance government had imposed a 10 per cent cut on non-plan expenditure last year to mobilise at least Rs 400 crore.

`'But were able to realisejust Rs 110 crore,'' the minister said..The alliance government has faced a resource crunch ever since it came to power due to unrealistic planning and populist schemes.

``Last year, the government had to bear an additional burden of Rs 800 crore towards increased dearness allowance and Rs 700 crore for the Maharashtra State Electricity Board as per the directives of the World Bank ,'' a senior official said. ``Our plan is of the order of Rs 11,600 crore, but every one in the government knows it is unrealistic and we are not in a position to raise huge funds to meet the plan size,'' he said.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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