Maharashtra's debt burden rises to Rs 2.09 lakh crore

Maharashtra’s debt burden is expected to increase to Rs 2,09,648 crore in 2010-11 and the percentage of fiscal deficit to the gross state domestic product (GSDP) is expected to increase to 2.4 per cent.

The Economic Survey for 2010-11 tabled by finance minister Ajit Pawar in the state assembly said it would move on the path of fiscal consolidation but the overall economic situation has forced the government to go slow.

However, there is a silver lining. The GSDP, by advanced estimates, is expected to grow at 10.5 per cent in 2010-11 against 8.7 per cent in 2009-10. Increased agricultural production would help agriculture and allied activities sector to grow by 12.5 per cent, against growth of 3.1 per cent in the previous year. The industrial sector is also expected to grow 9.1 per cent and the services sector by 10.9 per cent during the year. This was largely prompted by the growth in the construction sector.

Production of foodgrain is expected to register growth of 22.9 per cent to 15.46 million tonnes, against 12.58 million tonnes last year. Oilseeds production will increase to 4.88 million tonnes and cotton to 8.93 million bales. The area under rabi crops is expected to fall by 3.5 per cent, but production of cereals is expected to increase by 9 per cent, pulses by 17.1 per cent and oilseeds by 10.9 per cent. During the kharif season, sowing was completed on 15.04 million hectares which was 7.4 per cent more than the previous year.

On rising debt, the economic survey said the debt stock at the end of 2009-10 increased to Rs 1,83,825 crore of which open market borrowing (OMB) was Rs 61,573 crore (33.5per cent). During 2010-11, the net debt of the state government is likely to be Rs 25,822 crore of which Rs 21,847 crore will be the net internal debt, including open market borrowings. The debt stock is expected to increase to Rs 2,09,648 crore. The overall fiscal liability of the state has increased at a compound annual growth rate of 13.9 per cent during 2006-07 to 2010-11.

Further, the outstanding guarantees given by the state government at the end of 2008-09 amounted to Rs 21,301 crore. The major guarantees given by the government were the cooperation, marketing and textile departments (Rs 4,918 crore), industry, energy and labour departments (Rs 4,177 crore), public works department (Rs 3,535 crore), water resources department (Rs 3,123 crore) and water supply and sanitation departments (Rs 2,812 crore).

On the deficit trend, the survey said the percentage of revenue deficit to GSDP which was 2.4 per cent in 2003-04, declined to 0.8 per cent in 2005-06, following fiscal reforms adopted by the government. Thereafter, in 2006-07, 2007-08 and 2008-09 the state enjoyed revenue surplus. However, due to increased salary burden, revenue deficit was 1.4 per cent to GSDP during 2009-10. During 2010-11, though the expected increase in revenue expenditure is about 3.4 per cent, the percentage of revenue deficit to GSDP is likely to fall to 0.7 per cent.

According to the economic survey, revenue receipts were expected to be Rs 97,044 crore, against Rs 88,498 crore. Tax and non tax revenues are likely to be Rs 74,722 crore and Rs 22,322 crore respectively. Actual revenue receipts during April-December 2010 were Rs 69,273 crore (71.4 per cent of the budget estimates).