The Devendra Fadnavis government pulled out a poll sop opera in its final Budget before the Vidhan Sabha elections this year, with a bouquet of benefits for the distressed farming class, new schemes to target key vote banks like Other Backward Classes (OBCs) and Dhangars, and fresh steps to accelerate job creation in a flagging economy.
In the process, the government seemed to throw caution to the winds on the fiscal front, with the State’s 2019-20 budget proposing a significantly higher revenue deficit, over a third higher than what it had run up last year. Maharashtra Finance Minister Sudhir Mungantiwar on Tuesday presented a Budget with a revenue gap of ₹20,292 crore, ₹5,332 crore higher than the revised estimates for 2018-19.
Agrarian stress
Mr. Mungantiwar’s fifth Budget’s primary focus was on the agriculture sector, whose growth rate collapsed for the second year in a row to slump to 0.4% in 2018-19 as per the Economic Survey released on Monday. The official numbers confirm the stress in the agrarian economy that had driven farmers to undertake two long marches to the State capital seeking urgent interventions to bail them out of trouble over the past year.
“It is said that Jithe Samruddha Krishi, Tithe Rajyachi Sarshi ( Where the farmer is prosperous, that State is a winner) . The role of agriculture sector in employment generation is of immense importance...The government has given a thrust on improved agricultural technology, processing and allied industries,” he said, laying out a list of new measures for farmers.
With crop production having contracted 8% last year as per the Survey, the Budget has sought to alleviate the crisis by spending over ₹21,000 crore to address natural disasters, irrigation projects and soil and water conservation initiatives. Multiple ₹100 crore schemes have been announced for farmers’ welfare, enhancing agricultural research, crop insurance, farm schemes and animal husbandry department.
For the humble farmer
The scope of the Gopinath Munde Farmer Accident Insurance policy, that grants a compensation up to ₹2 lakh in case of a farmer’s death, has been expanded to include the family of the farmer whose name appear on 7/12 extract (land records). A sum of ₹210 crore has been set aside for this scheme and the effective people covered under the insurance scheme will shoot up from 1.37 crore farmers to 5.5 crore members of farming households.
To complete irrigation projects under the Pradhanmantri Krishi Sinchai Yojana, Baliraja Jal Sanjivani Yojana and irrigation through a piped network, an amount of ₹12,597 crore is proposed for the Water Resources Department. The government has also given its approval for artificial rain experiments, while putting aside ₹350 crore as grants for micro irrigation projects.
With job creation and industrial growth also slowing down in 2018-19, the Budget sought to spur new jobs through medium, small and micro enterprises and a new scheme called Chief Minister Employment Generation Program which plans to start 10,000 small industries with a preference for women and SC, ST entrepreneurs.
Growth pangs
With growth in 2018-19 estimated to be 7.5%, the same as last year, the government has proposed to revive the Maharashtra Economic Development Council. “It is being done to achieve the goal of one trillion USD economy for Maharashtra by 2025,” said Mr. Mungantiwar.
Bharatiya Janata Party’s (BJP) prospective vote bank of OBCs got special attention with schemes worth several hundred crores, as did the Dhangar community with a proposed outlay of ₹1,000 crore to implement 22 schemes on the lines of those implemented for the tribal community. Yet, the ₹2,814 crore allocation for the Vimukt Jaati Nomadic Tribes, OBC and Special Backward Classes department was lower than the previous year’s allocation of ₹2,963 crore.
With a considerable increase on expenditure on schemes meant for deprived sections of the society such as senior citizens, widows and divyangs; the Budget attempted to set the ruling party’s agenda of economic growth with social security for the Assembly polls.
Appeasing the electorate comes at a cost, and the Budget expects overall government debt for 2019-20 to rise to ₹4,71,642 crore, in comparison to ₹4,14,411 crore of the revised estimates of the previous fiscal.
Consequently, the total debt stock as a proportion of Gross State Domestic Product (GSDP) would rise to 15.8% in this financial year, from 15.6% last year.
