Fiscal position will be reformed, state assures World Bank

Sanjay Jog

Mumbai, Oct 31: The Maharashtra government, whose debt liability has shot up at a record Rs 70,528 crore, in its presentation before the visiting World Bank team has announced its resolve to maintain the sustainability of the deteriorating fiscal position, minimising the regidities in expenditure, improving revenue receipts to gross state domestic product (GSDP) ratios with a suitable mix of policy and institutional reform.

The government has expressed its desire to improve efficiency in the revenue collection mechanism, contain establishment related expenses, generate adequate budgetary surpluses after meeting adjustment expenses, control debt resources at substantial levels, restructure the role of government in social activities.

The government during its interaction with the World Bank chief economist Vinaya Swaroop and economist Paramita Gupta has also assured to restructure the government role in economic activities with an emphasis on commercialisation and building institutions with stakeholder participation.

The state government has pointed out that where full commercialisation was not possible or desirable, it would make efforts to actively investigate alternative arrangements with the purpose of enhancing the involvement of the stakeholders and pari passu, reduce that of government.

According to the government, it would establish regulatory bodies like Maharashtra Electricity Regulatory Commission for commercialised public services "to ensure fairness in the market." Further, efforts would be made to institutionalise debt management and other future liabilities of government such as pensions through the passage of appropriate legislation and counterpart change in the manner of their management.

According to state government’s medium term fiscal plan, its revenue receipts would grow from the budgeted estimates of Rs 33,634 crore for 2001-02 to Rs 37,239 crore in 2002-03 to Rs 41,276 crore in 2003-04 to Rs 45,815 crore. The revenue expenditure would rise from Rs 36,625 crore to Rs 39,287 crore to Rs 41,438 crore to Rs 43,719 crore during the same period.

Ironically, according to the government projections its expenditure on salaries would increase from Rs 14,104 crore to Rs 15,092 crore to Rs 16,148 crore to Rs 17,278 crore. The government has projected a revenue deficit of Rs 2,991 crore in 2001-02, Rs 2,048 crore in 2002-03, Rs 163 crore in 2003-04. However, it has predicted a revenue surplus of Rs 2,096 crore in 2004-05.