JAIPUR: For chief minister Ashok Gehlot, who also holds the finance portfolio, it would be hard to turn on the charm when he presents the state Budget on Thursday. Having raised power tariffs and liquor licence fees by h-efty margins earlier this month, Gehlot may not go in for new taxes. But given government’s handto-mouth existence, it is unlikely that he would have enough fiscal space to increase spending for infrastructure building and social sector programmes.
Having painted itself into a corner financially by waiving farm loans last year, the government is yet to break free from the selfimposed shackles. The slowing economy and subsequent lower tax collections and the Centre holding back about Rs 17,000 crore of GST are also not helping his cause.
“The government has shot its own foot by political announcements like the farm loan waiver. Contractors working on government projects, vendors and entities supplying goods and services are facing payment delays. Given the situation, we don’t expect the government to roll out many new schemes in the Budget, be it for general public or the industry,” said Suresh Agarwal, president of Federation of Rajasthan Trade and Industry.
Adding to the woes, its royalty revenue from oil and mining has also stagnated. The losses of discoms have been going up to the peak levels again. The policies announced to attract investment are yet to show results on the ground.
“The Budget would be a tight rope walk. The government had not expected the whole macro situation would turn hostile to growth, which would have bailed out the government’s profligacy. I think they are not working hard to come out of the sinkhole,” said an expert, who monitors government policy and development activities, preferring anonymity.
While no government official publicly admits, there is an informal austerity and cost cutting in place with departments unable to undertake new projects. In such an environment, it is too ambitious to expect the government to spend on projects like Delhi-Mumbai Industrial Corridor that requires large sums of money for land acquisition.
With no major election round the corner (except for municipal corporations), there is a view that the government should shift focus from offering populist measures to infrastructure development, which will help revive economic activities and generate jobs for the youth.
“Development infrastructure projects should not be starved of funds which has been the case in the past one year or so and they hold the key to revival of growth, which in turn will bring in the tax revenues that the state needs badly now,” said an industrialist.
While it is likely that the government will try to balance the Budget between the social sector schemes and asset creation, people said if the fund crunch continues, the latter will be more affected than the former.
Having painted itself into a corner financially by waiving farm loans last year, the government is yet to break free from the selfimposed shackles. The slowing economy and subsequent lower tax collections and the Centre holding back about Rs 17,000 crore of GST are also not helping his cause.
“The government has shot its own foot by political announcements like the farm loan waiver. Contractors working on government projects, vendors and entities supplying goods and services are facing payment delays. Given the situation, we don’t expect the government to roll out many new schemes in the Budget, be it for general public or the industry,” said Suresh Agarwal, president of Federation of Rajasthan Trade and Industry.
Adding to the woes, its royalty revenue from oil and mining has also stagnated. The losses of discoms have been going up to the peak levels again. The policies announced to attract investment are yet to show results on the ground.
“The Budget would be a tight rope walk. The government had not expected the whole macro situation would turn hostile to growth, which would have bailed out the government’s profligacy. I think they are not working hard to come out of the sinkhole,” said an expert, who monitors government policy and development activities, preferring anonymity.
While no government official publicly admits, there is an informal austerity and cost cutting in place with departments unable to undertake new projects. In such an environment, it is too ambitious to expect the government to spend on projects like Delhi-Mumbai Industrial Corridor that requires large sums of money for land acquisition.
With no major election round the corner (except for municipal corporations), there is a view that the government should shift focus from offering populist measures to infrastructure development, which will help revive economic activities and generate jobs for the youth.
“Development infrastructure projects should not be starved of funds which has been the case in the past one year or so and they hold the key to revival of growth, which in turn will bring in the tax revenues that the state needs badly now,” said an industrialist.
While it is likely that the government will try to balance the Budget between the social sector schemes and asset creation, people said if the fund crunch continues, the latter will be more affected than the former.
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