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State Finances In Bad Shape: Govt

State finances in bad shape: Govt

GANDHINAGAR: In its first sharp admission in many years ahead of the state Assembly session scheduled for later this month, the Gujarat

government has said the economic slowdown and increased burden of non-developmental expenditure have affected state finances badly. Delivering his speech at the meeting of state finance ministers in Delhi at Vigyan Bhawan on Thursday, minister of state for finance Saurabh Patel said, "Major sources of state revenues have declined. There is lack of buoyancy in tax receipts, while expenditures have risen due to commitments of the state government."

Things have turned so bad that the government wants the Centre to take care of almost everything ranging from salary of the state employees and the state's infrastructure needs to housing problems of the rural poor and urban joblessness. Patel said Gujarat which had only recently claimed to compete with the western countries in the fight against recession has 2.28 lakh homeless families. He asked the Centre to provide funds at the rate of Rs 90,000 per family for building houses for them!

Sounding alarm that the state's debt burden might snowball if not compensated, Patel asked the Centre to pay 50 per cent of the burden on the state coffers as a result of pay hike for lakhs of state employees due to implementation of sixth pay panel recommendations. The annual burden of Rs 3,000 crore is intensified due to Rs 5,000 crore paid as arrears. Result is, Gujarat, claimed to be a revenue surplus state, has "fallen into revenue deficit", he underlined.

Patel also told the high-profile meet, called by new Union finance minister Pranab Kumar Mukherjee, that lack of funds is a major reason why the canal network of the Sardar Sarovar project is failing to be implemented. Other demands included funds for flood management, for infrastructure for SEZs, and a liberal credit policy for the diamond sector.

Comments

The admission is really good.

The admission is really good. We need to have a thing figured out the right way. -Dr. Thomas Devlin

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