Maharashtra struggles to clear Rs 300-crore overdraft

Sanjay Jog

Mumbai, July 15: The Maharashtra government, which is in a deep financial crisis, is struggling hard to clear an overdraft of Rs 300 crore by Monday. The government is making all-out efforts to mobilise funds from its various undertakings flushed with funds to clear the overdraft.

This is the third time the state has drawn an overdraft during the Democratic Front’s government rule since October 1999. On earlier occasions the state had drawn an overdraft of Rs 450 crore and Rs 650 crore.

The opposition, which has been critical of the state government for inaction, is likely to expose it on the issue of overdraft in the monsoon session which will commence on Monday.

The state finance minister Jayant Patil confirmed that the state has drawn an overdraft. However, he made it clear that it will be cleared by Monday.

As per the Reserve Bank of India’s (RBI) guidelines, the state government will have to clear the overdraft within 12 working days. In case of Maharashtra, the 12th day falls on Monday.

State principal secretary for finance Anupam Dasgupta shared Mr Patil’s optimism and said that the state will be in a position to clear the overdraft by Monday. He, however, declined to give the exact amount of overdraft.

Mantralaya sources told The Financial Express that the state had to resort to avail the overdraft facility in view of drastic fall in sales tax collection and other revenues in view of slump in the economy. The government’s projections of sales tax collection have gone haywire mainly because of slow growth in the economy.

It had estimated that the sales tax collection would be more than Rs 15,000 crore. However, there has been a shortfall.

It must be mentioned here that Mr Patil had already told the state legislature in the past that the government would have to draw overdraft in future also. He had blamed the previous Shiv Sena-BJP government for making the state economy “weak” following a debt of over Rs 37,000 crore raised during its tenure. Mr Patil has presented an annual budget of 2001-02 with an uncovered deficit of Rs 750.43 crore. He had estimated an additional resource mobilisation of nearly Rs 550 crore through imposition of new taxes and revision of existing
one.