Fifteenth Finance Commission chairman NK Singh Wednesday officially denied the recent official press comminque by the panel that raised concerns over the performance of Maharashtra on economic and social fronts and blamed it to lopsided interpretation of performance indicators. In a statement issued by Press Information Bureau (PIB) ahead of the panel’s Maharashtra visit, concerns were raised over the falling growth in revenue receipts, excess borrowings and revenue deficits, among other factors of the state.
It took a political turn as these views got interpreted as a critique of the present BJP government. Singh, who wrapped a three-day visit which included a meeting with chief minister Devendra Fadnavis and Reserve Bank governor Urjit Patel on the first day, said the data for fiscal 2018 has not been taken into consideration while preparing the PIB statement issued last Friday.
“Things must be said in a perspective. There was no intention to cast any aspersions or much less an indictment on what Maharashtra is doing or has done,” Singh told reporters at the state’s official guest house Sahyadri. “It would be completely misleading to pick on one year or randomly one year or pick on a state. In relation to other states which are comparable, the performance of Maharashtra has been better,” he said, and called for comparing the performance of Maharashtra with other fast growing states like Tamil Nadu, Karnataka and Gujarat.
He said the PIB commentary on revenue receipt growth declining from over 17 per cent to 11 between FY09 and FY17 should have also taken into account the numbers of FY18, as there was a “general slowdown in FY17 across all the states. Similarly, the criticism on lack of progress on human development indices also does not hold true, and pointed out to the improvement that the state has achieved in overall ranking which moved up to 5 now from 8th in 1988.
“The state seems to have faltered in translating its high economic growth into commensurate human development,” a background note issued by the PIB ahead of the panel’s visit had said, pointing out that 125 of the 351 blocks in the state are still identified as backward areas. On concerns over rising revenue deficits which is forcing the state to borrow more than budgeted, Singh clarified that Maharashtra or its various agencies have used the money for things like infrastructure development. When asked if the PIB has analysed the data wrongfully, Singh said, “PIB has not analysed it wrong. Someone else has done it, and someone else who has analysed it ought to have done it in a different way.”
Singh said the state has done good to reign in fiscal deficit at below 3 per cent and has borrowings under the 20 per cent of GSDP cap set as part of fiscal consolidation framework. Other, fiscally profligate states should learn from Maharashtra, he said, asking the state to spend more on capital expenditure for social good.
Singh also flagged concerns on the dependability on revenue projections under the GST framework as a challenge before the panel, whose recommendations will be enforced between fiscals 2020 to 2025. He also cited the myriad of Centrally-sponsored schemes which lead to “dubious outcomes” and the surcharges and cesses being charged by the states as other challenges.
Singh said Maharashtra has submitted a detailed memorandum in consonance with the terms of reference for the panel, and added the panel shares the aspirations for urban pockets like Mumbai and Pune to grow for having a multiplier effect on the overall economic growth of the country. He said the large amount of migration into the financial capital is a problem special to Maharashtra that needs solutions, but underlined that states like Kerala have benefitted from it.
Singh said states’ finances have come under stress during the past two years due to the Seventh Pay Commission award and the troubles being faced by many states with their bankrupt discoms. The Finance Commission is racing against time, as it has finished visiting only nine states with another 20 to go, Singh said, adding it has to submit its recommendations by the end of next year.