Plan to shore up poor finance

By Mahesh Vijapurkar

MUMBAI, DEC. 1. Two major steps are in the offing in Maharashtra to shore up the State's presently very poor finances: return to octroi by civic bodies which are now compensated by an ``in lieu'' payment for not levying it and auction of permits to liquor stores, either for renewal or new ones.

Burdened by an enormous wage bill of up to 67 per cent of its revenues, the Maharashtra Government is carrying what it calls the ``bad fiscal management by the previous Government led by the Shiv Sena,'' and is anxious to find new measures since sales tax has reached a saturation level. These two are such new options.

Civic bodies are currently being paid money equal to what could have been collected by them as octroi and they are rather happy with the situation of not having to spend on such a department and suffer complaints from the trade and industry of harassment and delays at check posts. An estimate made available to The Hindu indicates that close to Rs. 800 crores can be garnered annually by the Government by these two measures. Without them, the finances would continue to be precarious, but the word of caution by sources is that ``it does not mean we would move from the red ink to the black.''

Presently, following the abolition of octroi from May 1, 1999, the Government annually doles out Rs. 460 crores to the 228 civic bodies in the State with a commitment to factor in a ten per cent hike annually to take into account possible pro rata growth in octroi revenue had it been in force. These measures would probably be in force from the next fiscal year and could well be a budgetary step to be taken in April 2001 by the Finance Minister, Mr. Jayant Patil, who is beset with an unenviable task of balancing the books of a near bankrupt Government.

Send this article to Friends by E-Mail

Section  : Other States
Next     : Doctor gets bail in paper leak case