State government sources told The Financial Express that Mr Deshmukh gave these directives at a special cabinet meet which met on Thursday to discuss the "growth" strategies with an emphasis on curb on expenditure and overheads, increase growth rate at 10 per cent, redistribution of subsidies and explore additional avenues of resource mobilisation. The government sources said that the proposed VRS would not be implemented at one go but would be spread over over certain period. "The finance department has been asked to prepare the VRS package which can be later offered to employees," sources added.

According to these sources, the amount required for the implementation of VRS and the actual manner in which it would be implemented, would be known after the finance department's report.

Simultaneously, the finance department has been asked to find out various measures to reduce state expenditure on salaries and wages. More than 71 per cent of the state revenue has been incurred on state administration and salaries.

According to the various studies prepared internally by the finance department, the implementation of fifth pay commission recommendations had put an additional burden of Rs 5,000 crore and added that the salary related expenditure would go on increasing annually.

State govt puts electricity reforms bill on hold
The Maharashtra government, which has come under severe attack for the purchase of "costly" power from the Dabhol Power Company, has decided to put on hold the release of state electricity reforms bill. Instead, the government would follow the provisions of Electricity Bill 2000 to be tabled by the Centre for the "revival of the loss making Maharashtra State Electricity Board."

Mantralaya sources said that the government has decided to give a top priority to support MSEB for bringing back its glory and making it financially sound.