A day after a conditional farm loan waiver was announced by the State government, sources in the Finance Ministry have warned of a 20-25% cut in funding for development projects, and a delay in implementing the Seventh Pay Commission recommendations.
The initial mathematics shows the waiver could cost the government around ₹25,000 crore.
The number may change depending on the outcome of the meeting of the joint committee of government officials and farmer representatives to finalise the conditions for the waiver.
“To generate ₹25,000 crore, a number of avenues have to be explored. The State is yet to gauge the response from implementation of the GST. The implementation of the pay panel would cost the State over ₹20,000 crore. We will have to delay the implementation of it by another year. Dearness allowance of the employees may see cuts,” said a finance department official, who did not want to be named.
Cost the govt. dearly
He said ongoing projects such as metro, road will see cuts in funding.
The State is constructing a number of memorials such as a Chhatrapati Shivaji statue in the Arabian sea and the Dr. Babasaheb Ambedkar memorial at Indu Mill.
“Whether to suggest cuts here will be a political decision.”
The State, however, finds solace in the fact that the Centre will reimburse the existing sales tax collection with 14% addition.
