With a small negative list of activities not amenable to physical distancing or ‘less critical’ for the economy, the first steps towards reviving economic activity in Maharashtra following the prolonged lockdown should involve opening up of sectors yielding high revenue with a multiplier effect on demand, such as infrastructure, real estate and transport, a committee of officials has said.
The committee constituted by the State government to suggest a roadmap for resuscitating the moribund economy, has warned that the State’s fiscal parameters are in trouble — with revenue receipts for this financial year likely to slip 40% to 45% or ₹1,40,000 crore, accompanied by higher expenditure on public health, food and civil supplies as well as Home Department spending to maintain law and order.
Stressing that the State should urge the Fifteenth Finance Commission open up a special funding window for States’ Covid-19 mitigation measures, the group steered by retired and senior serving bureaucrats has said in its report that the State is likely to get just ₹2.07 lakh crore as revenue compared to the Budget estimate of ₹3.47 lakh crore.
To reduce the State’s fiscal deficit, the report reviewed by The Hindu has suggested that the State’s borrowing limit be raised to 5% of Gross State Domestic Product (GSDP) from 3% presently. It has also suggested to defer all loans from the National Small Saving Fund (NSSF) by two years and to seek a non-debt transfers from the Government of India.
Spelling out sector-wise recommendations, the report has asked the State government to identify and targeted support high revenue-yielding sectors such as real estate, infrastructure, transport, and excise generating sectors. Infrastructure expenditure must be initiated to pump prime the economy, it mooted, suggesting the State kickstart stalled infrastructure and construction projects and release payments for contracts that have already been provisioned but delayed. It also suggested releasing retention payments for completed projects.
To support the industrial sector, the group has suggested sanctioning an increase in the limits for loans, overdrafts and cash credit without collaterals, interest subvention schemes and faster disbursement of government receivables. To cut down major costs for industries, the group has suggested that electricity-related duties and charges be reduced, waived or deferred. Rationalisation of water consumption charges and providing wage ex-gratia assistance and subsidy schemes with delayed repayment options has also been suggested.
For agriculture, the report has recommended setting up control rooms at the State and district level to address on-ground issues such as market operations, transportation and permits, farm labour movement and export-related issues.
The State government needs to ensure availability of inputs such as seeds and fertilisers. APMCs need to be restarted by decentralising operations through sub-market yards. It said that NABARD funds can be used to ensure crop loans and agricultural credit.
