Retired bureaucrat Sudhir Srivastava express confidence over controlling on the fiscal crisis
Mumbai: The Coronavirus pandemic has threatened to set off a financial contagion in the world economy and Maharashtra cannot be left untouched by its collateral effects. There is a big challenge before India’s most advanced and financially strong state – Maharashtra – to overcome the fiscal crisis. Aiming to get the solution from expertise how to tackle this crisis, the Maharashtra government has formed an 11-member committee and asked it to submit its recommendations before April 30.
SudhirKumar Srivastava, former Additional Chief Secretary (ACS), Finance, and member of the committee, expressed confidence that the state will ride through the crisis situation.
Though the scope of work for the committee has not yet been finalised, as the committee was formed on Tuesday, Srivastava said that he thinks the committee will work on five major points.
According to the retired bureaucrats, the first challenge before the state is to fight against the Covina-19 pandemic. “First priority will certainly be the war against the Coronavirus. The second challenge will be the social security of the citizen of the state. People are fearful that they will lose their jobs. It’s the duty of the government to assure them of their job security,” said Srivastava.
Srivastava added that the third priority is to begin agriculture-related work, the fourth one is to resume production, and manufacturing through Micro, Small and Medium Industries Entrepreneurs (MSME) and the last but not the least is to overcome the financial crisis.
Recalling his memories served on various positions in the finance department, Srivastava said that is satisfied to get an opportunity to work in the finance department in a state like Maharashtra.
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“I’m happy that I had served this state in the finance department during the year 2000 till 2016. When I took charge, the per cent of debt over state exchequer against the state Gross State Domestic Product (GSDP) was around 27 per cent. Now it’s come down to some 16 per cent. It was systematic efforts of then finance ministers and state administration guided by then Chief Ministers,” said Srivastava.
Praising present Chief Minister Uddhav Thackeray and Deputy Chief Minister and finance and planning minister Ajit Pawar for reposing confidence among the people that the government is solidly behind them in their support, Srivastava said, “CM Thackeray and DCM Pawar has clearly said that they will stand strongly behind the people during this crisis. This message has boosted the morale of the people. Now we can face the financial challenge.”
Financially challenge before the state is not small by any means. Maharashtra spent Rs 1.77 lakh cores on salary, pension and interest on that amount in the year 2019-20. It was 57.40 per cent of the annual revenue receipt (Rs. 3.09 lakh crore) in the same year.
Ashok Chavan, Minister for Public Works Department (PWD) has said that the state’s financial situation is critical and it is not possible to pay the salary of the government employees. Chavan has suggested the state to take a loan to ensure at least government employees can get their salary.
Reacting on this critical situation, SudhirKumar Srivastava said, “Maharashtra is financially disciplined state. The situation is still under control. The ratio of debt against GSDP is around 16 per cent and we have still scope to borrow the loan from various sources”
At present, Maharashtra has a debt burden of Rs 4.64 lakh crore in the fiscal year 2019-2020 and it was projected that the debt will reach Rs. 5.20 lakh crore at the end of the fiscal year 2020-2021. The ratio of debt against GSDP was 16.12 per cent in the year 2019-20, which is much below the prescribed cap limit. According to fiscal discipline norms, the state can borrow debt up to the limit of 22 per cent against its GSDP or annual revenue receipts.
“We are financially strong enough. We have scope to borrow the loan and we can manage it. Though, Coronavirus epidemic will give set back financially, we will come to the normalcy very soon,” Srivastava expressed confidence.
Referring to the fresh guidelines issued by the union home ministry on Wednesday morning, Srivastava said, based on these guidelines, we will discuss with industries secretary about how to open some manufacturing units in the safety zone and bring the production in normalcy after April 20.
“It will help to get employment, generate money and will get the power of purchase to the consumer. This cycle will support to get control over the financial crisis,” he said.
The state has formed the committee under the coordination of Manoj Saunik, additional chief secretary (finance) to rejuvenate the economy of the state. The members of the committee consists of senior retired bureaucrats Including JS Sahani, Subodh Kumar, Ramanath Jha, Umeshchandra Sarangi, Jayant Kawale, Sudhir Srivastava. Apart from theses, ACS (planning), Principal Secretary (Industries), Principal Secretary (Finance reforms) are also the members. The committee has to submit its recommendation to the state by April 30.
