MUMBAI: Anticipating a massive third wave of Covid-19, the state government has slashed budgetary expenditure for fiscal 2021-22 by 40% to conserve funds for infrastructure and medicines required for a caseload of up to 50 lakh.
Maharashtra had 19 lakh cases by the time the first wave ended and 40 lakh in the second wave, which is now ebbing.
Medical education director T P Lahane said numbers were “difficult to predict … we need to prepare”.
The cut in spending by Rs 52,000 crore was announced on Thursday by the finance department.
In the event of a Covid resurgence, the state expects at least 25 lakh patients to rely on public medical facilities.
Given the challenge, it is firming up a plan to stock up on medicines and kits on a large scale.
The slash in the Rs 1.3 lakh crore budget will impact all wings save public health, medical education, and food and drug administration.
It will hit new projects, curtail discretionary outlays on workshops, printing of diaries, etc and curb recruitments.
Spending cut 40%, govt hiring & functions to be scaled backThe cash-strapped Maharashtra government on Thursday imposed a 40% cut in the Rs 1.3 lakh crore budgetary provisions made for fiscal 2021-22 to mobilize up to Rs 52,000 crore to tackle expenditure linked to the Covid-19 pandemic.
The drastic cut is expected to force the government to scale back on new projects, curtail discretionary spending on workshops, seminars, printing of calendars and diaries, apart from putting restrictions on expenditure incurred on government functions and recruitment to vacant posts.
The state hopes to conserve scarce resources for welfare schemes, including centrally-sponsored ones, pension, subsidies and wages.
The finance department under deputy chief minister Ajit Pawar on Thursday issued a resolution for the cut.
A senior official said the state is saddled with a debt burden of over Rs 6.15 lakh crore and since the lockdown in March 2020, its revenue collections have dipped.
Manufacturing activity has slowed, excise and stamp duty collections have reduced.
“Last year, we spent a huge amount to tackle Covid and now we will have to again make provisions.
Since we can’t enhance taxes, the only way is to cut budgetary provisions,” a senior official said.
On May 4, 2020, the state had initiated stringent measures to cut down expenditure.
Later, the norms were relaxed as the financial situation improved.
But in view of the possibility of a third wave, the government is anticipating the need for more funds.
“We have issued an order to provide for utilization of only 60% of budgetary provision.
Priority will be given to state’s share in centrally sponsored schemes, wages, pension and honorarium, and a nutritious food plan for the poor.
We have asked all departments to only spend on essential items,” a senior official said.
Departments of public health, medical education, and food and drug administration have been declared as the “priority departments” for tackling Covid-19 through the resolution.
It also says that in the event of a high court order directing the government to release funds, the financial situation must be brought to the notice of the court and the scheme closed in consultation with the court.
The order says barring priority departments, all others have been warned not to spend funds on routine work.
They should not hold seminars or workshops without the prior permission of the finance department.
And unused deposits lying in banks should be transferred to the government before June 30, 2021 and till then their bills are not to be passed.