Poor rainfall may widen revenue deficit to Rs 7,000 cr: Maharashtra

Govt mulls mobilisation of funds from cash surplus undertakings at 5.5-6% rate of interest

The government in Maharashtra is worried about the impact on state finances if there’s a third year of drought.

As on date, 239 of 355 talukas have seen above-average rain. In another 61, there’s been 75-100 per cent of the average rainfall. In the other 14, rainfall has been 25-50 per cent of the average.

The state finance department has said it was a cause of concern if the dry spell continued for a longer period especially in the talukas where rainfall has been above average or between 75-100 per cent. The low rainfall may lead to double sowing or destruction of kharif crop resulting in a fall in the foodgrain production.

A senior government official, who did not want to be named, told Business Standard : “The situation is being monitored regularly. Clearly, a third year of drought will put pressure on state finances and affect various development work. The revenue deficit is expected to increase to Rs 7,000 crore, against the budget estimate of Rs 3,757 crore, by the end of 2015-16.

The government spent Rs 13,000 crore in 2013-14 and Rs 3,000 crore in 2014-15 on relief to farmers hit by drought, untimely rain and hail. The combined debt burden is Rs 3.45 lakh crore. The plan is to keep the fiscal deficit below three per cent of gross state domestic product and maintain the debt limit at two per cent. The government might raise loans from its cash-surplus undertakings at an interest of 5.5-6 per cent, against the usual eight per cent, the official said.

The official said Rs 40,819 crore had been parked by 57 state undertakings in various deposits. Some of the cash-surplus ones are Mumbai Metropolitan Region Development Authority (Rs 16,627 crore), City and Industrial Development Corporation (Rs 7,146 crore), Maharashtra Housing & Area Development Authority (Rs  7,020 crore), Maharashtra State Road Development Corporation (Rs  720 crore), Slum Rehabilitation Authority (Rs 1,988 crore) and Vidarbha Irrigation Development Corporation (Rs 2,757 crore).

The official said the state cabinet would take a decision to raise funds from these agencies.