A World Bank report on state finances has warned that Maharashtra is heading towards insolvency by 2005-06 unless its revenue and deficits besides debts (including off-budget borrowings) are reigned in.
The report also comments on the liability overhang (estimated at Rs 4,000 crore by the state finance department at the beginning of 2002-03) with the treasury issuing post-dated cheques from revenues collected in a current year to pay for the expenditures incurred in the previous year.
In a Maharashtra-specific analysis the report states:
Finance Minister P Chidambaram today said the government was not in a position to borrow beyond a limit and that there was a need to bring down the ...
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