Mungantiwar to urge Jaitley to direct RBI to lend money to govt

The state government will urge Arun Jaitely, Union minister for finance, to intervene and direct Reserve Bank of India to allow Maharashtra to borrow Rs 34,000 crore from nationalised banks.

Sudhir Mungantiwar, minister for finance and planning, is likely to meet Jaitley on Wednesday in Delhi. However, his meeting was yet to be confirmed by the Union ministry.

Mungantiwar said he will urge Jaitley to direct Reserve Bank of India to approve loan worth Rs 34,000 crore to the state. “I will also urge the Union minister to instruct RBI to allow state to repay the loan in instalment of Rs 10,000 crore a year,” he said.

He added that Maharashtra can repay Rs 10,000 crore a year to banks as loan and interest. The interest to the loan by the bank is expected to remain at 6.5%-7%.

“Maharashtra can borrow loan up to 22.07% against the state’s Gross Domestic Product (GDP) and the state has borrowed up to the limit of 15.05%. This means we can borrow at least 7% of our limit,” said Mungantiwar.

The minister explained the three methods to increase income that can help the state to not cut down on capital expenditure.

“We have two-three ways to increase the state’s income. We can save up to Rs 5,000 crore from fiscal discipline, up to Rs 10,000 crore to Rs 15,000 crore by cutting budgetary provision to various departments and can increase non-tax revenue by Rs 10,000 crore which is likely to reach up to Rs 25,000 crore.”

State will also receive 14% share from the Centre after GST is rolled out from July 1.

“Foundation of Non-Banking Finance Corporation (NBFC) will be the last option, which will allow the NBFC to direct control over amount worth Rs 60,000 crore of various departments,” he said.

Sudhir Mungantiwar, minister for finance and planning, is likely to meet Jaitley in Delhi on Wednesday