MP Budget: Huge debts incurred by govt signal financial crisis

"No new taxes, no relief", with this headline most of the newspapers published the news of budget presented by Madhya Pradesh finance minister Jagdish Devda. Contrary to public expectations over relief in VAT on petrol and diesel, he presented a Rs. 2,41,375 crore budget with a deficit of Rs. 52,266 crore.

While keeping VAT of fuel untouched, Devda also spared the people by not imposing any new tax and kept the tax slabs unchanged.

Amid deep financial crisis and mounting debt figures, the minister announced revival of some populist schemes like Chief Minister Teerth Darshan Yojana, and said that the "tax and non-tax revenue are likely to be up by 33% in 2021-22". He said the budget deficit is 5.51% of the GDP.

The finance minister maintained a stoic silence when he was confronted with a barrage of questions post budget presentation about relief on petrol and diesel which is costing about Rs. 100 per litre at most locations in the state.

"A huge decline in the revenue receipts was witnessed because o the Covid-19 pandemic and the revised estimates of the revenue receipts are expected to be around Rs. 211,376 crore which is 2.25% of the GSDP," Devda said.

While Chief Minister Shivraj Singh Chouhan termed the budget path breaking and a vision for self-reliant Madhya Pradesh, leader of opposition and PCC chief Kamal Nath called it listless and a pack of lies.

Besides Kamal Nath, most critical appraisal of the budget came from Raghavji, former BJP finance minister. Raghavji said the state is under heavy debt. The amount of the debt is more than the budget allocation. It is bad for the fiscal health of the state. He said that budget of the state is 2.41 lakh crore but the total debt is 2.50 lakh crore. Thus the major portion of the budget is used for the payment of interest.

This is nothing but financial mismanagement. He regretted that the government did not give any relief to the people who are paying very high prices for diesel and petrol. The price of these two essential commodities in Madhya Pradesh is highest in the country. The cost of registration of property should have been reduced which incidentally is also highest in Madhya Pradesh.

He also expressed the view that GST has not proved beneficial for the health of the state. He recalled that during his six year tenure as finance minister he did not allow GST to be levied in the state and also led campaign against GST. He also pointed out that there are thousands of vacancies in various departments. Because of this the administration is getting adversely affected. Vacancies in police and education departments affect the progress of the state. He also pointed out that lack of strategy for the industrial development and also for the expansion of tourism.

The finance minister did not make any special provision for farmers. In fact allocation for waiving kisan loan has been reduced. Congress government under Kamal Nath allocated Rs 8,000 thousand crore in the budget of 2019-20 for this purpose. But the present government has reduced it to three thousand crore.

Massive allocations have been made for construction of roads, bridges and other infrastructure. Jobs for 28,000 persons have been provided in the budget. Observers however feel that budget has been made keeping in view forthcoming local body elections.

(IPA Service)