Officials say that, if the present mess continues, the state will end up registering a deficit of Rs. 3,000 crore by March 31, end of the current financial year.

They say that, for the first time, Rajasthan defaulted in the monthly repayments to the Centre.

It has defaulted for four months, with the current accumulated repayment liability around Rs. 600 crore at the rate of Rs. 125 crore per month.

Government employees, for the first time in 12 years, were denied bonus. The sources said the position of salary payment and meeting establishment expenses was no better, but a crisis had been averted for the time being. However, the fresh instalment of hiked DA, due after every six months, has been withheld. A ban was imposed on encashment of earned leave by employees and anunannounced curb on clearance of medical and tour bills and loans.

Though the economy was under strain for several years, particularly after implementation of the Fifth Pay Commission report, what proved to be the proverbial last straw on the camel's back was Gehlot's populist decision to lower retirement age of employees from 60 to 58 years in line with the party commitment to provide more job avenues for youth. This necessitated an outflow of Rs. 1,100 crore, which the state was ill-prepared to bear. Gehlot's predecessor, Bhairon Singh Shekhawat, earlier increased retirement age, primarily to save money.

The government shelled out Rs. 500 crore every month for salaries. Another Rs. 125 crore was routed through the panchayats every month to pay salaries to teachers. The total salary bill of the seven lakh employees equalled the state's entire tax revenue. Gehlot was therefore faced with the unenviable task of keeping the government going by paying salaries to employees, taking care of maintenance ofinfrastructure and carrying on some basic services and development work. This may necessitate a reduced plan size too. Every government in the state had to make special efforts to supply drinking water to people, particularly in rural areas, and conduct famine-relief work from time to time. The state received inadequate rainfall this year, warranting special measures. Rajasthan would need around Rs. 200 crore to supply drinking water for the remainder of the current financial year, while the same amount will be needed for relief operations.

With the kharif crop already damaged, the state will need to pump in something like Rs. 150 crore to support the Rajasthan State Electricity Board to meet farmers' demand for more power.

Health and education, sanctioned Rs. 1,000 crore and Rs. 3,000 crore for the entire year, could not be subjected to any cut.