Madhya Pradesh CM Shivraj Singh Chouhan hands over a cheque to a meritorious student during an event in Jabalp... Read More

BHOPAL: A slew of pre-poll populist decisions by the BJP-ruled government in Madhya Pradesh have put an additional financial burden of Rs 5,000 crore on the state's exchequer. With assembly elections just three months away, the sops announced by chief minister Shivraj Singh Chouhan during his ongoing `Jan Ashirwad Yatra' will see the state finance department managing an additional fund of Rs 4000 crore by the end of September.

Sources in the finance department disclosed that in order to avoid an overdraft situation, the government took an additional loan of Rs 1,000 crore this month at a higher interest rate of 8.25% adding a total Rs 5,000 crore to its loan account this year. State finance minister Jayant Malaiya though, ruled out any financial crisis but, clarified that government could draw loan to its extended limit and trying to decrease the revenue expenditure.

"We have our priorities set as per the demand for which we could draw loan as per the limit set by the RBI. If there is a demand and loan is available at a cheaper rate we borrow it from the market," Malaiya told TOI.

Effect of financial crisis in the state came to fore when chief minister Chouhan during a meeting convened on August 8 to discuss `road map for prosperous state' with the top brass, asked to seek other resources, besides the traditional one, to generate and increase revenue of the state.

"Officials should do away with traditional resources of generating revenue and depending on departmental budget. They, instead, should look for additional sources of income and create new resources through creative efforts to move ahead with the plan. A creative outlook and commitment works better than dependence on budget", said the chief minister.

Sources in the finance department revealed that recent sops announced for farmers, labourers, poor and women would cost more than Rs 16,000 crore to the state's exchequer. The fined tariff and power tariff waiver would cost Rs 5,500 crore while, sops to labourers would cost Rs 5,000 crore. Besides, welfare schemes for farmers under Bhawantar, bonus distribution, MSP and crop insurance would cost another Rs 6,000 crore to the government.

Funds were pooled in for payment to farmers for procuring their crops by cutting budgetary expenditures of almost all the departments. Yet, the government fell short of funds and more money was borrowed from the market.

"The government can also draw 3.5% loan of the fiscal deficit limit, from the market which is Rs 12,000 crore. Funds for externally aided projects or special projects have also been managed besides, arrears of 7th pay commission to the pensioners and employees which is around Rs 600 crore", said a senior officer in Mantralaya.

It was also stated that the government was seeking state's share from the centre on tax collection and GST which has been delayed. However, the state finance minister rule out any such delay.

"We have been receiving Rs 4,200 crore as 42% devaluation from the centre besides, share of GST to the state. We are also out own resources to manage funds which is enough to suffice our demands", said Malaiya who presented a supplementary budget of Rs 11,190 crore in the assembly on June 26 but could manage only Rs 5,000 crore.

As per the CAG report presented in March this year, the state is indebted with a loan of Rs 1.83 lakh crore. The government has spent Rs 47,564 crore in last two years as interest on this loan and also defaulted on payment of arrears announced for its employees.

