State’s debt to touch Rs 4.61 lakh crore in 2018-19

Mumbai: The farm loan waiver scheme and implementation of the Seventh Pay Commission’s recommendations will push the debt of the state to Rs 4.61 lakh crore in 2018-19. The debt burden of the state will be 16.5 per cent of the Gross State Domestic Product (GSDP). The government will have to spend Rs 1.64 lakh crore in 2018-19 for the payment of salary, pension and interest over loans, which is 57.50 per cent of the revenue receipt.

Though chief minister Devendra Fadnavis and finance minister Sudhir Mungantiwar are claiming that debt of the state is under control, financial indiscipline and increase in revenue expenditure is likely to dent the state’s exchequer. Farm loan waiver is expected to cost around Rs 30,000 crore, and the government has raised Rs 20,000 crore through loans, and remaining amount will be garnered in the financial year 2018-19.

Mr Mungantiwar has announced provisions for Seventh Pay Commission in the budget, but he didn’t mention the amount. After the Bakshi Committee submits its report by July, the state government will implement the pay commission in two-three months.

Hence, the government will make a provision of Rs 10,000-12000 crore in 2018-19 budget which will be increased through supplementary demands, said an official of the finance department. The burden of Seventh Pay Commission will be around Rs 23,000 crore each year and arrears of Rs 50,000-55,000 crore will have to be allocated in three years. Considering loan waiver and pay commission’s cost, the debt burden will increase up to 4.61 lakh crore or even further.

In the year 2018-19, the government will spend Rs 1.02 lakh crore (Budget estimate) on salary (35 per cent of revenue receipt), Rs 27,378 lakh crore (9.57 per cent) on pension and Rs 34,385 crore (12 per cent) for the payment of interest on loans. The government will overall spend Rs 1.64 lakh crore. In a current financial year, the government is spending Rs 1.41 lakh crore on salary, pension and interest payment, which is 54.87 per cent of the revenue receipts, as per budget documents.

But the government has not made all provisions in the budget to show the fiscal and revenue deficit is under control and the debt burden will increase at the end of the year,  sources said.

Meanwhile, chief minister Fadnavis has claimed that debt burden is under control and is in line with the financial discipline norms of the Reserve Bank of India.

The long march

Farmers, who are a part of ‘Long March’ to Mumbai from Nashik, camped on the Batsa River banks near Valkas Phata in Shahapur tehsil of Thane on Friday. The Long March has been carried out to highlight farmers’ problems including compensation for natural disasters, farmers’ suicides and loan waivers.

The march began from Nashik on  Tuesday (March 6) and is expected to reach the state Legislature in Mumbai on  March 12, Kisan Sabha state general secretary Dr Ajit Nawale said on Friday.