Wednesday, March 23, 2011

City counts high in state's income

The commercial capital of India is not just the most sought after destination for employment in the service sector but it also generates the highest revenue for the state income.
Mumbai and its suburban districts, along with Thane and Pune contribute 56% to the state income.
The economic survey of Maharashtra for 2010-11 is a pointer to the imbalance in the socio-economic development across the state. Although it promises a double-digit growth at 10.5% with agriculture and allied sectors contributing 12.5%, industry 9.1% and service sector 10.9%, there are indications of delay in achieving the fiscal consolidations as desired because of growing expenditure in the state administration.
Despite a sustained growth, the government appears to be grappling to contain the increasing debt. The survey estimates the debt rising to Rs2,09,648 crore.
The overall fiscal liability of the state has increased at a compound growth rate of 13.9% during 2006-07 and 2010-11. The loan raised from central government during 2009-10 was Rs1,291 crore. Taking into consideration the repayment or redemption of loans and deposits of Rs8,996 crore, the net debt of the government amounted to Rs23,153 crore.
Earlier, chief minister Prithviraj Chavan maintained: "There should be concerns about the debt because of borrowings from the Centre. Major parts of the funds loaned are invested in infrastructure which is integral for the state welfare."
However, the leader of the opposition Eknath Khadse termed the rising debt as signs of fiscal indiscipline. The opposition also blamed the government for neglecting sectors that lead to regional imbalance.
In the backdrop of the debate on shrinking agriculture land being acquired for development of real estate and special economic zones, the economic survey established the growth in service sectors at the cost of agriculture and allies activities.
The statistics for the last 50 years show the share of agriculture and allied activities in the state income has steadily declined from 31.1% to 10.5%, whereas share of the service sector has risen from 45.5% to 60.6%.
However, it was heartening to note that Maharashtra continues to lead in country's economy with contribution 15%, whereas the devolution of funds from the centre remains stagnant a little above 5%.
The administration's concern over Gujarat getting away in the investment sector is proved wrong by the survey. Maharashtra remains the chosen destination for the investors thus giving it a leading status in the industrial sector. The states share in proposed investment and employment in county is 10 and 15% respectively. A total of 20,484 industrial projects including foreign direct investments of Rs9, 20, 121 crore have been approved for setting up new industries in state till 2010.
Despite sustained measures the irrigation and power remains the key concerns.

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