Maharashtra No. 1 in FDI but now also No. 2 in debt burden, after Tamil Nadu

MUMBAI: Though Maharashtra leads among states in foreign direct investment, it has achieved the dubious distinction of being No. 2 in debt burden after Tamil Nadu. According to data compiled by RBI, while the debt burden of Tamil Nadu stands at Rs 8.34 lakh crore, Maharashtra's is at Rs 7.82 lakh crore and Uttar Pradesh is third (Rs 7.69 lakh crore).
When deputy chief minister Ajit Pawar, who also holds the finance portfolio, presented budget estimates on Thursday, it was stated that the debt burden will cross Rs 7.82 lakh crore at the end of March 2025.Ten years ago, in 2014, it was Rs 2.94 lakh crore.
According to the document tabled by Ajit Pawar, expenditure on salaries was Rs 62,123 crore in 2014 and will rise to Rs 1.59 lakh crore by March 2025, pension in the same period is up from Rs 17,385 crore to Rs 74,011 crore and payment of interest from Rs 23,965 crore to Rs 56,727 crore. As a result, outstanding liabilities stand at Rs 7.82 lakh crore, the document stated.
Former bureaucrat Mahesh Zagde, who has done research on administrative reforms and cost-cutting measures, felt that even if the state govt takes a series of austerity measures, it will not be able to reduce the debt burden. "We must analyze how the debt burden has reached this point. We took huge loans without taking into consideration whether we needed such large amounts," Zagde said.
He felt it was high time the state finance department came out with a comprehensive paper on state finances, on how loans were secured and whether such huge amounts were utilized for the purpose for which they were taken.
"The state govt has right to secure loan from financial institutions and open market, but it should not be utilized for drafting populist measures to secure votes in the elections. Loans must be utilized for enhanced productivity and GDP," he said.
During the Shiv Sena-BJP govt's tenure from 1995 to 1999, a white paper was published on state finances, and it was then proposed to wind up loss-making state-run corporations. However, in the last three decades, not a single corporation has been closed.
There was also a proposal for management of human resources. The state has lakhs of employees, and a bureaucrat said it was time it assesses its requirements in this regard. "For several years, we have been emphasizing on cost-cutting in terms of pruning manpower, but in the recent past, no steps have been taken in that direction," the bureaucrat said.
A former chief secretary felt that both chief minister Eknath Shinde and deputy chief minister Devendra Fadnavis should call for a meeting of serving and retired bureaucrats for a discussion on reducing the debt burden.
The former chief secretary said that cost-cutting should begin from the offices of CM Shinde, Fadnavis and deputy chief minister Ajit Pawar. "I am told that their offices are over-staffed," the ex-bureaucrat said.