Bouncing cheques ring in alarm for cash-starved UP government

Bouncing cheques ring in alarm for cash-starved UP government
RB Singh

LUCKNOW, JAN 18: On Wednesday, telephones of about 300 Uttar Pradesh government officials were disconnected after two cheques issued by the state government amounting to Rs 65 lakh bounced. Officer on Special Duty in the state's administration department, Ajai Singh, requested the deputy director of the treasury to make payment against the cheques, but in vain.

The financial position of the state has been deteriorating for the last 15 years. But the announcement of concessions for traders, teachers, and farmers by Chief Minister Rajnath Singh with an eye on the assembly elections has aggravated the situation. Now the state government is finding it difficult to pay even salaries to its employees.

It has taken some steps to cut unproductive expenditure which is unlikelyto ease the situation. The government has banned fresh appointments and abolished vacant posts. It has withdrawn telephone facility provided toofficers drawing salaries below Rs 12,000-16000 scales. It has also withdrawn STD facilities at the residences of Lucknow-based officers except those of secretaries and heads of departments. Foreign tours, dinners and lunches in five-star hotels by officials at the government's expenses and purchase of new vehicles have also been banned. But these steps are unlikely to bail out the state government.

The chief minister had recently promised to get the 5th pay commission pay-scales to teachers which would cost the state exchequer Rs 1600 crore. He had also announced many concessions to traders which would certainly reduce the receipt.

Against the tax recovery target of Rs 11,481 crore during 2000-2001, so faronly Rs 6,500 crore has been collected. It has requested the Reserve Bank ofIndia not only to raise the overdraft limit from Rs 736.18 crore to Rs 1000 crore but also to increase its period to 15 days.

The state government has pinned hopes on the 11th Finance Commissionrecommendations. After the 10th finance commission recommendations, it hadgot Rs 36158.91 crore. Now it expects Rs 78,509.30 crore. It also expects arise in small savings from Rs 4,300 crore to Rs 4,799.31 crore.

Receipts have registered an increase, from Rs 1,600 to Rs 2,390 crore permonth, but expenditure too has gone up from Rs 2,000 crore to Rs 2,900crore per month. The deficit in the current year till October 2000 was Rs 4,813.01 crore. It is likely to reach Rs 5,884.16 crore by the end of thecurrent financial year against Rs 7,253 crore in 1999-2000.