Notwithstanding with its claim of a ?comfortable? financial position, the state government has instructed the finance department to prioritise expenditure before clearing any bills, especially for irrigation projects. According to sources, the bills, which used to be paid in one-go, are now being cleared in two to three installments.
Though officials confirm payment delays, they claim that revenue collections have been stable, but the capital expenditure is increasing since irrigation projects have been speeded up in the last one to two months. This explains ?prioritisation? of payments, they say. A senior official told FE that the government proposes to distribute the available fund judiciously to all, so that project works will continue without any hindrance.
Being 2008-09 the election year, irrigation contractors are worried that the government may increase its spending on subsidies and welfare activities as the year progresses. ?We have just closed the accounts for the first quarter and usually the government clears the entire bill with full payment,? a contractor said.
The welfare expenditure bills like reimbursement of school fee, student scholarships, salaries of outsourced workers, pensions, mid-day meals etc are being paid in full. In the case of other expenditures, the departments have been asked to take prior approval even if the expenditure is approved in the state budget.
The reason for the present financial belt-tightening is the exchequer?s dependence on the proceeds of land sales, which was a failure last year. The budget proposes to raise Rs 12,500 crore through land sale.
?We have proposed in the budget to raise funds from land sale. Ofcourse, we need to achieve the target this year,? state?s finance minister K Rosaiah said. However, he felt the delay in raising funds through land sales will not hinder the proposed projects and welfare schemes.
Meanwhile, the Hyderabad Urban Development Authority has sought the government?s permission to withdraw the clause that reserves 20% of the developed land to economically weaker sections.