MUMBAI: Six months after it announced a major cut on spending due to the Covid-19
pandemic, the cash-starved state government on Tuesday partially lifted the curbs in an effort to stimulate the economy. The decision will make an estimated Rs 30,000 crore available for developmental work in the state.
As per an order issued by joint secretary (finance) Vasant Patil, all restrictions on MLA
constituency development fund have been lifted. Each MLA/MLC receives Rs 3 crore for development work in their constituency. Departments associated with resource mobilization and employment generation will also be able to utilize 75% of the budgetary provision.
Finding itself at the epicentre of the pandemic and alarmed by huge shortage of funds to tackle the crisis, the finance department had on May 4 imposed a 67% cut in budgetary provision for the financial year 2020-21. The government expected to mobilize Rs 70,000 crore.
A senior official said ever since the outbreak of Coronavirus, the entire economy has come to a grinding halt and inflows have completely dried up. Key departments like excise, transport and revenue which generate a major part of the state's budget failed to garner even 50% of the target amount.
On the other hand, the home, public health, medical education and food and civil supplies departments had to spent several times more than the budgetary provision for the current financial year. "In the current financial year, we spent only for urgent work," the officer said.
He said not only the state government, but even the Central government and the Reserve Bank of India (RBI) had taken a slew of measures to deal with the economic fallout of Covid-19.
"RBI has given us guidelines to enhance cash liquidity. At the state level too, the entire cabinet took note of the resource crunch and drafted measures to tackle the economic crisis. It appears we are on the comeback trail now. The first indicator of economic revival is the significant increase in GST collection," he said.