ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Maharashtra Budget, 2000-2001

Maharashtra budget 2000-01 shows that the government has missed an opportunity to set its house in order. Reformist rhetoric notwithstanding agriculture continues to escape the tax net, procurement schemes for cotton continue to make losses and the state government continues to be downgraded by the credit rating agencies.

Maharashtra budget for 2000-01 was presented amid great expectations on March 22, 2000. The Democratic Front government, comprising a coalition of eight political parties, had, soon after coming to power in November 1999, launched a scathing attack on the erstwhile Shiv Sena-BJP coalition government for having mismanaged the finances of the state and brought it to penury. A white paper was presented by the government to the legislature in its winter session in December 1999 in which the previous regime was roundly castigated. Since then, the chief minister as also the finance and other ministers have been repeatedly using the public platform to bring home to people the dire condition of the finances of the state and how a great deal of financial discipline and hard decisions would be necessary to set the house in order. Against this background, it was expected that the budget for 2000-01 would be a harsh one and will set the tone for the restructuring of the state finances. But, these expectations were belied.

A reference may be made to yet another development which had cast its shadow on the budget. This pertained to the lowered rating of the state-backed bonds by credit rating agencies. Credit Analysis and Research (CARE) has downgraded the AA-(so) ratings assigned to five state government guaranteed irrigation development bonds to A+(so). This follows the re-rating of the implicit outstanding rating of the government of Maharashtra from AA- to A+. The AA(so) rating assigned to the state government guaranteed debt instruments of the Maharashtra State Road Development Corporation too has been placed under review for a possible downgrade. CRISIL too rates the state government guaranteed obligations at A(so).

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