Maharashtra taps new sources to fund loan waiver
TASK AT HAND Govt is largely banking on nontax revenue to ease the burden of waiver that is expected to reach ~32,000 crore
Already reeling under the debt of over ~4 lakh crore, the Maharashtra government — which announced a loan waiver of ~30,000 crore on Sunday — has a herculean task of raising funds.
The government has started tapping sources to generate revenue and is largely vouching on non-tax revenue as the taxation has reached its saturation.
According to rough estimates, the burden of the loan waiver is expected to reach ~32,000 crore, with the state government approving waiver for all farmers irrespective of their land holdings.
A high power group of senior ministers, which is discussing the loan waiver with farmers, is also considering roping in banks to spread loan amounts over the next five years so that it can cut down the yearly burden to ~6,000 crore.
According to a senior minister who is part of the group, the government will give banks guarantee in the form of bonds with future validity. He claimed that many private and nationalised banks have approved the idea. The committee of the senior bureaucrats, appointed by the government to tap the sources of revenue mobilisation, has stressed on the mobilisation of non-tax sources.
“We have reached a point of saturation in taxation on almost all fronts. The thrust will be on collecting the taxes to their fullest by plugging leakages. Among the identified sources, there is huge potential of revenue from land monetisation. For instance, redevelopment of governmentowned Bandra colony may fetch us ~10,000 crore in future.
Similarly, the leased properties in Mumbai and its suburbs have potential to earn a huge amount on revision of the lease rates,” he added.
The state faced a deficit of about ~14,000 crore last fiscal owing to poor collection from major sources.
Slump in the real estate sector after demonetisation and the Supreme Court’s order to ban liquor shops within 500 metres of the state and national highways led to a shortfall in collections by over ~5,000 crore. Both the sectors are likely to fail in reaching their annual targets this fiscal too and may make it difficult for the government to meet overall revenue receipts.
“The home department has proposed a hike in fees for police permissions. The revenue department is looking to generate funds from immovable properties, while the urban development department is tapping chances of premium on Floor Space Index and revenue from the Transfer of Development Rights,” said a finance department official.
The officials, however, admit that the development works and outlay for the capital expenditure will be badly hit. “Though we have identified various sources, materialising them will face many hurdles . This will result in short spending on projects in the current year. Whatever money is raised will fall short as the government has to also bear the burden of ~20,000 crore to implement the seventh pay commission,” the officer said.