Caught between budget promises and old pension scheme

Chief Minister Eknath Shinde with Deputy Chief Minister Devendra Fadnavis at a function in Shivaji Park last year. Pic/Rane Ashish

As head of the finance department, Deputy Chief Minister Devendra Fadnavis presented his first-ever budget, clearly keeping in mind the political traction the new government wishes to get from target groups. He made provisions, announced a slew of new schemes and extended the existing ones now being executed by the Centre with the support of the states. His resolve to deliver the Panchamrut (five-elixir) principle comes from a concept that is powered by the double-engine format, a collaboration between the Narendra Modi government and the BJP installed in Maharashtra last year.

Every detail of the budget has been designed by Fadnavis, a keen student of budgeting practices. Ever since he entered the legislature in 1999 and got an opportunity to attend the successive budget sessions controlled by the then ruling parties for 15 years, he has made a mark as a harsh critic and budget analyser (from the Opposition benches). He has authored a book ‘How to read the budget' that is a handbook for newcomers to the legislature and journalism field. Later, his own government tabled five successive budgets that also reflected his thoughts as the CM.

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This time around, he is directly in it as the FM and in-charge of various other departments that together need a huge budget outlay. He came out with a politically smart budget ahead of the 2024 elections, covering aspects that the previous governments, even his tenure, hadn't done much about. A changed political scenario of the state demanded that he did it in order to outsmart the Opposition that had been promising to put up a united flight to displace the Eknath Shinde government, and also stop the BJP-Shiv Sena (Election Commission recognised) from bagging as many Lok Sabha seats in Maharashtra next year. A critic, who dissected the budget most of his political career, now faces the Opposition's accusations that the budget is a hogwash and jugglery of figures.

Implementation a challenge

Fadnavis and Shinde have less than a year, before the Lok Sabha polls are announced, to get the money required to implement their assurances. When asked about the deficit the government has shown in the budget, Fadnavis told me that any welfare state would have a deficit and he hasn't played figures to decrease it, because it isn't worrying when compared with the budget's size. Availability of funds wouldn't be a problem, but a major challenge will be to get the government system to deliver, he said. "Take for example, the housing scheme for various sections. We are planning to construct 10 lakh housing units in one year. The system hasn't taken up such a mammoth task ever before. We will have to ensure the delivery as promised," he told me. There are many other things on this government's agenda falling within the budget and outside it. Projects that raise funds from the sources other than the budget keep rolling even if the governments change. The work on Mumbai's metro projects didn't stop, though it was slowed in some sections because of political matters. The Samruddhi Mahamarg and MTHL were delayed but construction didn't stop. The municipal projects in Mumbai went on. But when it comes to budgetary allocations, the Opposition benches allege that their expenditure is always much less than the yearly share. The Opposition says the coming year will be no different (maybe because similar things happen when they are in power).

OPS a financial concern

Amid allegations and counter allegations, a demand for reviving the old pension scheme (OPS) has intensified. The Opposition sees it cornering the government. Employees have given a call to stop work from March 14 planning to pressure the government that will be holding the budget session till March 25. The government is in talks with employees and the Opposition, which is suspected to be fuelling the agitation. Fadnavis has cautioned the Opposition and the parties that will come to power in the future to think practically instead of emotionally about the demand, that, if met, will heavily burden the state coffers by year 2030. With committed expenditure on salary, pension and debt servicing mounting in the years to come, Maharashtra will have only 17 per cent of budget money left to spend on other things after seven years. The projections for the states that have revived OPS substantiate the observation Fadnavis has made while replying to a debate on the demand. It's a matter of concern for the parties who want to manage state finances practically not politically.

It is even more serious for the common man who looks up to the governments to have the required money to spend on their welfare. A very small number of people get government jobs and the right to arm-twist the rulers to get their unreasonable demands met, even while others, who are in very large numbers, strive hard to earn and secure their future without much government assistance.

Dharmendra Jore is political editor, mid-day. He tweets @dharmendrajore
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