Coronavirus Impact on Maharashtra: State Govt Freezes New Capital Works Till March 2021, Decides 67% Cut in Development Spending
Mumbai, May 5: Amid the death of 583 people due to coronavirus in India and over 14,000 affected, reports arrived that Chief Minister Uddhav Thackeray-led government would freeze on new capital works till March next year. Among the biggest state in India, Maharashtra has decided to impose a 67 percent cut in development (scheme) spend for 2020-21, considered to be the highest since 1960.

Informing about the recent development, a senior government official said, as quoted by Indian Express, "This is the deepest ever cut in expenditure since the state was formed in 1960." Earlier in March, Uddhav Thackeray government had presented a Rs 4.34 lakh crore budget for 2020-21, which was 4.1 percent over the revised estimate for 2019-20.
In the state budget, the capital outlay -- spending leading to asset creation -- was estimated at Rs 45,124 crore for FY 2020-21, which was 2.6 percent lower than in 2019-20. However, the state Finance Department estimated a loss in tax revenues of about Rs 50,000 crore due to coronavirus lockdown. Earlier, the state’s own tax revenues were budgeted at Rs 2,25,071 crore. While with current situation prevailing in the state, officials claim that revenue loss would surge in the coming times.

It is to be known that state Finance Minister Ajit Pawar has written to the Union Finance Ministry seeking Rs 50,000 crore package for the state economy. However, no reply has arrived from the central government so far. ing the COVID-19 lockdown in place, the state government has allowed only five departments to expend -- public health, medical education, food and drug administration, food and civil supplies, and relief and rehabilitation. 
Apart from these, a 67 percent cut in expense had led to stalling of state’s farm loan waiver scheme.loan arrears between April 2015 and March 2019, totaling Rs 2 lakh, were stalled, while new one-time settlement scheme for farmers with arrears over Rs 2 lakh is yet to take off. The later has been announced by Pawar in his Budget speech. Even departments have been asked to cap administrative expenses at 75 percent of the budgeted amount.