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  Metros   Mumbai  20 Sep 2018  Finance commission now praises Maharashtra’s economy

Finance commission now praises Maharashtra’s economy

Published : Sep 20, 2018, 6:48 am IST
Updated : Sep 20, 2018, 6:48 am IST

After raising questions, says its fiscal discipline is laudable.

The 15th Finance Commission meeting on Wednesday.
 The 15th Finance Commission meeting on Wednesday.

Mumbai: After raising questions over the growth of Maharashtra, the 15th Finance Comm-ission of India has now showered praise on the state’s economy. While addr-essing a press conference in Mumbai, the chairman of the commission, which is on a three-day visit to the state, called the state’s financial discipline ‘laudable’ and ‘an ideal’ for other states. The commission clarified that the press note issued by it expressing worry over the state’s economy was based on numbers provided by the accountant general of Maharashtra. This has come as a relief to the state government as it was heavily criticised for the state’s deteriorating growth.  

Meanwhile, chief minister Devendra Fadnavis presented his demand of  Rs 50,000 crore for overhauling the infrastructure of Mumbai and its suburbans to the commission. He also made a made a demand of Rs 25,000 crore for the development of Vidarbha and Marathwada regions.

Talking about observations that were made by the commission earlier that called the state’s financial condition worrisome, the chairman of 15th Finance Commission N.K. Singh said, “Let me put it blatantly. We do not manufacture the figures. But, having said that, the numbers till 2017 picked from accountant general of state were analysed. And so were those observations.”

Mr Singh further said, “But the numbers given by the state government from the current year are not just reassuring but laudable. In 2016-17, the revenue receipts were of Rs 2,04,000 crore and they increased to Rs 2,43,000 crore in the year 2017-18. This, at a time when other similar states like Kerala, Tamil Nadu and even Gujarat’s growth is down. But, Maharashtra’s revenue growth is 13.80 per cent in 2017-18 from 11.05 per cent in 2016-17. That is commendable.”

This comes as a relief to the state government as it was under fire over a note given by the commission in which data was divided on a year-wise basis and a decline in growth was shown from 2014, the year the Bharatiya Janata Party (BJP) came to power. Mr Singh said, “We should not take things in this way. We should look at the larger perspective. I have data of almost a decade and, in that perspective, the financial discipline shown by Maharashtra is definitely an ideal for other states.”

Talking about fiscal deficit and capital expenditure, Mr Singh said, “The Maharashtra government’s debt into GDP ration is almost 17 per cent. According to the RBI rules, it should be under 20 per cent. So, there is still a space for capital expenditure for the state. We have asked state government to look into it.”

Mr Singh also said that the memorandum given by the state government was ‘assuring’ and ‘aspirational’. “The most important thing we liked is that this government aspired for a trillion dollar economy for the state. And it also has a proper plan for it. This was reflecting in the precise memorandum that the government has put before us,” said Mr Singh.

While making a presentation before the commission on Wednesday, Mr Fadnavis emphasised the role of Mumbai in the development and growth of the country. “Maharashtra contributes to 15 per cent of GDP growth of the nation. Twenty per cent of India’s exports are done via Maharashtra. Almost 31 per cent foreign direct investment in India comes to Maharashtra. So, on all these accounts, Mumbai is a very important city for the financial activities of the state and the country. It is rightfully the financial capital of India. So we will have to enhance the infrastructure of the city to meet the challenges,” he said.

The chief minister also pointed out the backward regions of the state during the presentation. “Out of 34 districts in state, 16 are backward. Their per capita income falls below the average of India. So to ensure their economic and social progress, we will have to invest in various aspects,” he said.

Apart from this, the CM also demanded Rs 1,700 crore for infrastructure enhancement of courts, Rs 1,117 crore  for forests and conservation, Rs 1,400 crore for coastal security, and Rs 825 crore for cultural and heritage sites.

Mr Fadnavis also made a demand for enhancing the state’s share in taxes. As of now, states get 42 per cent in central taxes, but he demanded 50 per cent. He cited the increase in tax collection due to Goods and Service Tax (GST) and said that it has been successfully implementation in Maharashtra.

The Finance Commission has said that it will consider giving special assistance to Mumbai city, as demanded by the state government. “The migration problem is a special issue for this city. Mumbai has been a growth centre. To improve infrastructure here, the state has made a special demand. We will consider that,” said the commission. The state government has made a demand of Rs 50,000 crore for the development of Mumbai and its suburbs. “The government has already taken initiatives to develop the infrastructure of the city and it was briefed to us. We will consider the demand,” said commission chairman N.K. Singh.

The Opposition has started making the issue political. Congress states chief Ashok Chavan slammed the BJP for mismanaging the economy. “These people just keep talking and making tall claims. But, on the ground, there is nothing. Even the Finance Commission has said this now. It has shown how the development of the state is hampered as tax collection has gone down. Despite looting people with taxes on petrol and diesel as well as cess for drought, the state government has nothing to show in the treasury. This is an example of financial mismanagement,” said Mr Chavan.

Tags: devendra fadnavis, goods and service tax, n.k. singh