Yogi govt faces catch 22 position on financial situation in UP

Yogi govt faces catch 22 position on financial situation in UP


Yogi govt faces catch 22 position on financial situation in UP


Lucknow:  With its commitment to waive off farm loans and pay salaries as per the Seventh Pay Commission recommendations, the Yogi Adityanath Government in Uttar Pradesh finds itself in a catch 22 position, on whether to impose a new tax or go with a heavily deficit budget. The officials in Finance department have no clue. Neither Finance Minister Rajesh Agarwal is forthcoming with his reply. “I know your question. You want to know whether we will impose new tax or not? How can I say that now? If I tell you this right now what will I present in Vidhan Sabha. This much I can tell you that at this point of time I am not sure whether we should impose tax or not,” Mr Agarwal said here today. Tongues are wagging on speculation that if the Yogi government kickstarts the development projects, as promised in the election campaign, from where will it generate huge finances, as the government has to waive off Rs 36,000 crore farm loan, as promised earlier. Besides, the government will be facing an additional burden of Rs 34,000 crore as salary for the government employees for the implementation of Seventh Pay scale recommendations. The next fiscal is also likely to witness a skewed ratio in expenditure and revenue collection. If high expenditure is expected in form of farm loan waiver and payment of increased salaries to the government employees, this next fiscal is bound to witness less revenue collection from Excise and Mining because of change in mining policy and non-opening of liquor outlets across the state, following the Supreme Court directives to shift liquor shops from Highways. In this scenario, the government seems to be skating on thin ice, where expenditure is likely to be high in 2017-18 and collection is likely to be less. If one takes a glance at last year's budget, the fiscal deficit was around Rs 6000 crore and the then Akhilesh Yadav government had spent over Rs 10,000 in launching new schemes, which in fact is less than one-third of the amount government is likely to waive of as farm loan. 'Yes, the government is alive to the crisis staring at our face. There is additional burden of Rs 67,000 crore, which we need to manage from our own resources. Please count another Rs 1000 crore, which we will give for preparation of Ardh Kumbh in Allahabad. It is a big challenge to manage our resources. I have my plan in place and will answer all the queries,' the Finance Minister said in his candid discussion with this reporter. He said there are some commitments, which need to be fulfilled. 'We are clear about our responsibilities. Whatever payments need to be made, would be made in due time. We will also clear the farmers' cane dues and pay other dues,' he assured. Over the Goods and Services Tax (GST), he said the state will stand benefited, because 'We are a consuming state. States like Kerala, Maharashtra, Tamil Nadu, Andhra Pradesh and Gujarat, which are producing states, will feel the pinch,' he added. The budget session of UP Assembly, which had been delayed due to the Assembly polls, is likely to be held from the first week of July.

Share it
Top