Farm loan waiver impact: State cuts govt spending

CASH CROP Infra & development projects’ budget to be slashed by 30%

Bureaucrats will now have to avoid official air travel by Business Class for meetings and conduct them, if possible, via video-conferencing. Buying of new vehicles has also been stopped till further orders. This follows an austerity measure adopted by the Fadnavis government following the Rs 34,000 crore loan waiver for distressed farmers.

However, the austerity measures will not affect the functioning of ministers.

The state finance department has issued instructions in this regard and has asked all officials to avoid unnecessary expenses and opt a policy of frugality to overcome the fiscal deficit after the farm loan waiver.

Chief Minister Devendra Fadnavis had said development work will be affected due to the loan waiver of Rs 34,000 crore. But he has assured the state will find out a solution to overcome the deficit by borrowing from banks.

Towards achieving this target, Finance and Planning Minister Sudhir Mungantiwar had recently met Union Finance Minister Arun Jaitley urging him to direct the Reserve Bank of India to lend term loans in instalments to the state government.

“As the negotiations with banks are yet to begin and the state administration is not sure about whether RBI will lend the amount required for the loan waiver, the finance department issued the austerity guidelines for all department heads,” a finance department official said on Sunday.

“According to the guidelines, additional chief secretary, who is allowed air journey by business class for official meetings, has been instructed not to travel by this class but address meeting through video-conferences,” the official added.

Buying of four-wheelers for officials and government departments has been suspended for now. Photo-copying documents is also to be avoided and scanners used in its place. Mungantiwar said budgetary cuts of government departments is the last option.

The budget for development and infrastructure will also be slashed by 30 per cent, sources said. Works of new roads and construction of irrigation projects will be the worst affected. However, salary, pension, schemes under the Food Security Act, women and child welfare measures, scholarships of students and schemes under social justice and tribal ministry will be spared the cuts.