Free schemes, debt interest and salaries consume 70% of budget:MP’s big projects like roads, water, metro put on hold, reveals finance department’s half-yearly report

Madhya Pradesh’s budget, which had remained in surplus for many years, has gone into deficit for the first time. This has been revealed in the Finance Department’s six-monthly report for April to September. The report shows that the state government’s spending on welfare schemes and fixed expenses has increased sharply. The largest cash transfer scheme, Ladli Behna, costs the government about Rs 1,890 crore every month. Apart from this, around Rs 7,000 crore is spent every year on electricity subsidy. Salaries, allowances and pensions together cost about Rs 95,000 crore annually. The government also spends nearly Rs 2,800 crore on free ration schemes and more than Rs 5,000 crore every year on farmers’ honorarium schemes. Because of these expenses, about 70.87 percent of the total state budget of Rs 4.21 lakh crore, which is around Rs 2.98 lakh crore, is being spent on free schemes, repayment of loans and interest, and on salaries, allowances and pensions. Due to the continuous rise in revenue expenditure, the budget has moved from surplus to deficit for the first time. The report says a fall in GST collection is a major reason for the deficit. It also states that Rs 18,000 crore meant for capital expenditure was used for revenue expenditure. This money was spent on salaries, pensions and schemes, which directly affected major development projects in the state. Which projects in Bhopal were affected? Has there been a decrease in income from mining and GST? Government expenditure has increased rapidly compared to its income. A large portion of the budget is being spent on free schemes, subsidies, salaries-pensions, and debt repayment. Moreover, the expected revenue from GST and mining could not be achieved, which has upset the balance. It has been reported that there has been a revenue shortfall of 8 to 10 thousand crores from mining and GST. Are salaries and allowances being met from capital expenditure? Yes. The report states that 18 thousand crore rupees earmarked for capital expenditure were also diverted to revenue expenditure, meaning they were used for salaries, pensions, and schemes. This leaves less money for new projects. Experts said – giving freebies, means Not leaving a person capable of work
The introduction of free schemes for votes began with a single light connection during Arjun Singh’s tenure as Chief Minister. Now, various kinds of free schemes are running. This clearly means not leaving a person capable of work. The more subsidy you give, the more debt will have to be taken. Look at electricity subsidies; if the money is not recovered, it is converted into a loan. Efforts should be made by both the center and the states to move from the free system to permanent solutions. Revenue affected due to GST reforms at the central level Revenue has been affected due to GST reforms at the central level. But as purchasing increases, GST will also increase. In free schemes, attention to the deprived class is also necessary, along with all other classes. It is not right to raise revenue by increasing any kind of cess or tax; instead, other measures should be focused on.’ Manish Rastogi, ACM, Phil