Mumbai

MVA’s first budget: Book of Jobs, the Thackeray version

Tentative start: Chief Minister Uddhav Thackeray is flanked by State Finance Minister Ajit Pawar and Minister of State for Finance Shambhuraj Desai (left) near Maharaja Chhatrapati Shivaji’s statue at Vidhan Bhavan in Mumbai before presenting the budget for 2020-21 on Friday.

Tentative start: Chief Minister Uddhav Thackeray is flanked by State Finance Minister Ajit Pawar and Minister of State for Finance Shambhuraj Desai (left) near Maharaja Chhatrapati Shivaji’s statue at Vidhan Bhavan in Mumbai before presenting the budget for 2020-21 on Friday.   | Photo Credit: Vivek Bendre

Government bets on power tariff, stamp duty cuts to spur employment; VAT hike on fuel may hurt middle class

Presenting the Maha Vikas Aghadi’s first budget on Friday, Maharashtra’s Finance Minister Ajit Pawar sought to resuscitate the State’s flagging economy, with a clear focus on creating jobs for the youth and assuring distressed farmers that succour is on the way.

In a bid to spur industrial production at a time the State’s edge in manufacturing is on the ebb, Mr. Pawar decided to slash duties on electricity used for manufacturing purposes by nearly two percentage points. The electricity duty on industrial use too has been reduced from 9.3% to 7.5%.

Real estate boost

He also introduced a 1% concession on stamp duty and related charges for registering urban properties in major cities – with an eye on fixing the moribund real estate sector, one of the most critical engines of job creation in recent years. This will make it cheaper to register real estate transactions in the Mumbai Metropolitan Region and areas of municipal corporation of Pune, Pimpri-Chinchwad and Nagpur.

These sops, worth ₹2,500 crore, are expected to be offset by a hike in the value-added tax (VAT) levied on petrol and diesel by ₹1 per litre, which may have a slightly inflationary impact on prices in general and cramp middle class spending. However, the additional VAT collections are to be transferred to a green fund for spending on environment conservation projects, specifically those related to sewage disposal and waste management.

To pump prime the economy through infrastructure spending, the Budget has proposed an outlay of over ₹30,000 crore even as it separately seeks to expedite completion of long-drawn irrigation projects across the State.

Presenting his fifth budget so far (he presented four as part of the Congress-NCP government that was in power from 1999 to 2014), Mr. Pawar proposed an annual plan outlay of ₹1,15,000 crore for 2020-21, with a fiscal deficit of ₹54,618.38 crore and an estimated revenue deficit of ₹9,510.71 crore.

For youth and farmers

“The current economic downturn has been a large increase in unemployment. Under these circumstances, the government is striving to make the youth of the state employable and provide them jobs,” said Mr. Pawar, who is also the deputy chief minister in the 100-day old MVA regime.

A new Maharashtra Apprenticeship Scheme will be launched for educated unemployed in the age group 21 to 28 where they will be trained in government, semi-government and private establishments. The State will pay 100% stipend in first two categories.

Under a new Chief Minister’s Employment Generation Programme, grants of 15% to 35% of project cost will be given to new entrepreneurs. State-run industrial training institutes or ITIs will be transformed to modern skill centres at a cost of ₹1,500 crore over the next three years.

Taking forward the government’s flagship Mahatma Jyotirao Phule crop loan waiver scheme, under which loans up to ₹2 lakh have been waived off, Mr. Pawar allocated an additional ₹7,000 crore for 2020-21, taking the total to ₹22,000 crore. Farmers with arrears of more than ₹2 lakh will also benefit as the government will pay up after the outstandings above ₹2 lakh is paid by them. Mr. Pawar said farmers who took a crop loan in 2018-19 and regularly pay their dues will get ₹50,000 as incentive.

Mr. Pawar said five lakh solar agricultural pumps will be set up in the next five years with an outlay of ₹3,245 crore for agriculture and allied departments. Mr. Pawar said the Centre has approved only ₹956.13 crore of the ₹14,496 crore relief sought for farmers who suffered losses due to heavy rains. A sum of ₹2,034 crore has been earmarked for crop insurance scheme.

The government will give priority to 313 incomplete irrigation projects in a time-bound manner for which an outlay of ₹10,235 crore has been proposed.

More for MLAs

The decision to raise allowance for MLAs to develop their constituencies from ₹2 crore to ₹3 crore per year drew cheers from representatives across the benches.

Opposition leader and Mr. Thackeray’s predecessor Devendra Fadnavis slammed the budget saying the MVA government is hiding its failure under the garb of economic slowdown. “All announcements in the budget are based on Centre’s support. Common citizens have not gained anything from it, neither have farmers or already neglected regions such as Vidarbha, Marathwada and north Maharashtra,” he said.

In his reaction to the budget, Rustom Kerawalla, Chairman, Ampersand group, “The vision to upgrade Industrial Training Institutes and transform them into modern skilling centres will create a skilled workforce, enable them higher remuneration and empower them with future skills. We hope that the government will introduce virtual interactive classrooms in addition to the physical classrooms.”

Farshid Cooper, Managing Director of Spenta Corporation, welcoming the initiative to revive the real estate sector and said, “With the reduction of stamp duty by 1% for the next 2 years, we can expect to witness the revival of the sector and sale of the existing inventories. Huge unsold inventory and ready-to-move-in properties in Mumbai, Pune, and Nagpur are likely to benefit from this announcement. The festivities like Holi and Gudi Padwa are also approaching and we are hopeful that the sales will see an uptick in the next couple of quarters.”

Populist measure

On the other hand, Dr. Renita D’Souza , Fellow, Observer Research Foundation, said populist measures like loan waivers only appear to help the farmer. “They probably might in the short run. But the broader perspective would require empowering farmers by investing in their capabilities” she said. “This will unnecessarily increase the level of borrowing irrespective of agricultural need and speculative investments would be undertaken and regular repayments made to acquire the profit of ₹50,000,” she added.

For Imaan Javan, Director of Operations at Suntuity Renewable Energy India, a prominent feature of the budget was the proposed installation of solar pumps for farmers. “We welcome this decision which reflects the government’s commitment and concern for renewable energy generation. Finance Minister Ajit Pawar has stated that in five years, five lakh solar pumps will be installed. This will enable farmers to set up grid-connected solar power generation capacity giving back the farmers their livelihood. We hope this will boost the agriculture sector, help generate employment in rural areas, and also mitigate climate change,” she said.

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Printable version | Jun 7, 2020 5:27:42 AM | https://www.thehindu.com/news/cities/mumbai/mvas-first-budget-book-of-jobs-the-thackeray-version/article31005263.ece

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