Centre’s fund cut costs Maharashtra Rs1,500 crore

Maharashtra will face a financial cut of Rs 1,500 crore on various welfare schemes that are being funded by the Centre. The pecuniary loss was incurred after the Centre decided to change its funding pattern from 80 per cent (share by the Centre) 20 per cent (share by the state) to 60-40 per cent, putting an additional burden of 20 per cent on the state kitty.

The welfare schemes, including Sarva Shiksha Abhiyan, Anganwadi, mid-day meal and a few irrigation schemes, are the first casualties of the financial cut. The Centre’s decision is going to add more woes for the state, which is already reeling under a drought and debt of over Rs 3 lakh crore. The Centre had expected to increase the outlay of the states for financial year 2015-16 through the Goods and Services Tax (GST).

Finance minister Sudhir Mungantiwar said the state was in talks with the Centre to resolve the issue. “Some of our schemes will be affected by the Centre’s decision to cut funds, but we are in discussion with it so the issue can be resolved. Currently, the state will have to bear a burden of Rs1,500 crore,” Mr Mungantiwar said.

According to officials in the finance department, the fund cut is going to create more trouble for the state in the coming days. “We had requested the Centre not to take the decision on the cut before the Goods and Service Tax is passed in the Parliament. The fund cut will affect many schemes and the number of works also,” an official from the finance department said.

The state’s financial situation is grim, as it has abolished the local body tax (LBT) assuming the GST would be implemented. However, the GST proposal is stuck in Parliament.

The state government is already burdened with Rs 4,210 crore for a period of seven months from August 2015 to March 2016 against grants to the local bodies for abolishing the LBT.

An official said there was a possibility that the state might not take more works, as it has to spend money from its own pocket. “The state was able to take more works earlier considering the availability of Centre’s funding,” he added.