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Rediff News  All News  » Business » Shinde govt bleeds state coffers dry

Shinde govt bleeds state coffers dry

August 27, 2004 12:18 IST

Only days before the election code of conduct came into force in Maharashtra, the state's cabinet of ministers continued doling out taxpayers money from the Contingent Fund exhausting nearly Rs 100 crore (Rs 1 billion).

A near depleted CF, left the government with little choice but to move an ordinance to raise its limit from Rs 150 crore (that was almost over) to Rs 300 crore (Rs 3 billion) so that the expenditure that will have to be incurred for holding elections on October 13 may become available.

While Chief Minister Sushilkumar Shinde told mediapersons that the general administration department was at fault for not having made a demand for increasing the CF, the latter could not have an inkling that the fund was going to be depleted in a matter of a few months before the state goes to elections.

Confirming this a secretariat source says: "There were many individual proposals, like Rs 3 crore (Rs 30 million) that was released to Transport Minister Ashok Chavan for the setting up of a memorial (trust) in the name of former Union minister SB Chavan. The cabinet sanctioned the entire amount in one go from the CF despite opposition from the concerned department. Normally, the funds are released in installments as each phase of the construction work of the memorial is completed."

Similar instances are cited, about a proposal for beautifying two sides of a stretch of road in Solapur by Deputy Chief Minster Vijaysinh Mohite Patil. A sum of around Rs 2 crore (Rs 20 million) was sanctioned from the CF for this purpose as well.

"The Cabinet while clearing these proposals (from the CF) notes that since there was no budgetary provision for the initiatives, the funds were being released from the CF. Is the CF to be used for meeting unforeseen but much needed expenditure or such projects?" the senior government official asks.

Another proposal sought Rs 5.5 crore (Rs 55 million) for a spinning mill owned by Maharashtra home minister RR Patil that the Cabinet has cleared.

Yet another one cleared by the Cabinet will allow tax payers money to be used to finance 30 per cent of the equity of three wineries being set up by RR Patil, Sanjay Patil (Congress) and Maharashtra marketing Minster Harshavardhan Patil.  The three wineries would have a total equity capital close to Rs 20 crore (Rs 200 million).

Most of these Cabinet decisions have permitted the disbursement of the money from the CF, which left the fund nearly empty and in no position able to meet the approximately Rs 100 crore (Rs 1 billion) required for holding elections in the state.

The last minute ordinance, point out officials, may not easily find favour with Maharashtra Governor Mohammad Fazal who has taken issue with the state government on several past occasions.

Says a secretariat official: "We were constantly worried about being pulled up by the Governor who has taken a positively proactive role in the state administrations over the last few years, having shot off more than 300 letters to different state government departments."
BS Bureau in Mumbai