@RavikiranRKD
Even as general sentiments running high against the total lockdown, the possibility of which was briefly outlined by Chief Minister Uddhav Thackeray on Friday, the state government cannot afford it. Why? Probably for two reasons- one is administrative and the other one is political.
From the administrative point of view, again there are two points- one is the public outrage over the forcible measures of lockdown and the other one is the lack of manpower with the government machinery. When the state government wants just half of its manpower to register its presence each day, in such a scenario, the state government’s reliance on the police force invites public annoyance.
On the political front, the state government fights the battle on two counts. The first one is that the state revenue collections dip due to the restrictions on trade and business and movement of people. Its impact became evident when the state had to impose cuts on its spending and borrowed over Rs 10,000 crore from the Reserve Bank of India (RBI) to pay salaries and allowances of the state employees. The second reason is a purely political one which affects the development works across the state eventually affecting the popularity of the ruling party.
The state government predicament becomes a talking point when it does not have sufficient funds to pay salaries to its employees and the development works suffer. Resultantly, it delays infrastructure works and public amenities. During the last financial year, the government had to effect a 30 percent cut to the salaries and perks of the members of the state legislature.
Not just that they could not recommend development works from MLAs Local Area Development Funds (MLA-LADF). A ruling party cannot afford such as this as it directly affects the image of the state government and provides fodder for criticism by Opposition parties.
The state government had a very skilfully effected cut to the monthly salary of the legislators. When the central government amended the concerned legislation specifying a period- as the salaries, allowances, and pensions are fixed under a special act. But the state government did it through an order contrary to the legal standing. The state government preferred an order to avoid any specific period as it’s easy to revoke an order any time, which is difficult when the concerned act is amended to specify a period.
The local area development fund has always been a very crucial issue for the legislators as they can utilize this fund as per their desire for specific development projects. While an MLA can utilize it for the constituency he represents, an MLC can use it across the state, say legal provisions. Legislators take political mileage for the expenditure done for development projects under this head.
To please the legislators, Deputy CM Ajit Pawar announced an increase of Rs 1 crore taking it to Rs 4 crore per annum. Last year, though it was increased from Rs 2 crore to Rs 3 crore, the state could not release it due to the drop in revenues owing to pandemic-induced lockdown.
The current scenario at the state finances reveals a Rs 96,000 crore gap between the net tax collection for the financial year 2020-21 and the estimated figures. This gap between the state earnings and the expenditure forces the government to go for austerity measures. If the last year’s lockdown had delt such a heavy blow, it can force the state government to think twice before going for the total lockdown.
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Another impact of the dipping revenues can be measured easily by verifying the status of the ongoing projects of infrastructure development. The state government has its share committed for such projects. Apart from it, the possibility of the state going for availing loans increases adding to the burden of repayment. Because of this, it seems the government may not go for drastic measures.
One cannot disagree over the fact that the lockdown has forced a large number of families to reduce their expenses and adopt frugality. Scores of people have lost employment and others are working on heavy salary cuts. As such those affected go for buying of only essential items eventually affecting the overall growth of the state. Families that are dependent on daily wages from the unorganized sector will be dependent on the state government expecting help in kind or cash.
On a satisfying note, the state has seen remarkable growth in the agriculture sector. It may prove as a challenge as demand for food grains may witness a slump due to severe restrictions on weddings and public ceremonies, functions, and get-togethers. Restrictions at pilgrim centres and eating places will further reduce the demand for foodstuffs. To keep the momentum going, the state will have to think about different measures to cope with the distress caused by the pandemic.
Speaking from the political viewpoint, the ruling Maha Vikas Aghadi (MVA) government is passing through a rough phase due to the ongoing probe by the National Investigating Agency (NIA) in the controversial episode of explosive-laden vehicle, murder of Mansukh Hiren, and involvement of API Sachin Waze. The startling revelations coming from the investigation by NIA can certainly give sleepless nights to the ruling party members those allegedly protected by Sachin Waze.
The Shiv Sena-led government is currently fighting on two fronts- one at the Wazegate and related developments and its fight against the pandemic. Certainly, the government has a tough time ahead and it will be interesting to watch how it faces both the challenges.
In brief, the precarious health of state finances cannot improve in a short span of one or two years. Impact blows of it will be experienced for another two years at least. It will also affect the overall growth in various sectors and the ruling front’s preparedness for facing the next elections if the development projects remain incomplete or delayed much beyond the schedule. The ruling front can fight elections on just two counts- how it handled the Covid 19 pandemic and how it steered clear the state economy without affecting the overall development of the state.
