Eye on self-reliance to spur Maharashtra's economy, says Sudhir Mungantiwar

Maharashtra’s Minister of Finance and of Forests, and senior BJP leader Sudhir Mungantiwar was in the DNA office this week as the ‘DNA Newsmaker’. The Finance Minister spoke on a variety of initiatives the state government is taking up to enable an ecosystem which can help convert the state into a trillion-dollar economy. Mungantiwar explained a slew of measures to achieve this. Some of them were to reduce Maharashtra’s reliance on other states for products such as eggs and milk. While others focused on creating employment opportunities in the state.

He debunked presupposed notions that just because Maharashtra’s outstanding debt is more than Rs 4 lakh crore, the state is going through a financial crisis. He explained that the state’s ability to manage its debts is well within permissible limits.

While expanding on the forest ministry’s plan to save tigers he also mentioned the importance of conserving trees and preserving rivers to keep the nature’s cycle intact.

On the topic of a separate state of Vidarbha, he made it clear that on the lines of what Dr Babasaheb Ambedkar said, his party has always advocated for smaller states. However, he said that despite being personally in favour, his party doesn’t have the required numbers to implement it.

Mungantiwar was very cautious while opening up on the contentious issue of his party’s alliance with the Shiv Sena. He said that on the issue at large and on the specific contours of seat-sharing, it is the triumvirate of Maharashtra Chief Minister Devendra Fadnavis, BJP president Amit Shah and Shiv Sena president Uddhav Thackeray, who will call the shots and make the final decision.

What is the road map for Maharashtra to become a $1-trillion economy by 2025?

Prime Minister Narendra Modi has set an ambitious target for India to become a $5-trillion economy by 2025. In PM Modi, there is a leader who sees a dream. There are only two countries in the world, the US and China, whose economy is above $10-trillion, while the rest of the countries do not feature in the $10-trillion club.

If China had not dreamt of a $10-trillion economy, it would not have been progressing with a 6.6%-plus GDP. India and China are similar in several respects, except for the nature of government. India is a democratic country, while China is not. In addition, there is a global slowdown and the average growth has come down to 2.4%. And as such more efforts need to be made to increase growth.

For Maharashtra, we have set a target of $1-trillion economy by 2025. The formula is simple. Everybody residing in the state needs to act to achieve a trillion-dollar economy. The state government will approach farmers, industrialists, small-scale enterprises, self-help groups with the call, 'If you progress, nation will progress'.

The government will facilitate the doubling of income for every section.

For example, the process of mineral processing is very slow. If we speed it up, it will provide a huge benefit.

In addition, I had asked my department to prepare a list of goods and services imported from China in Maharashtra. I was quite surprised. I can understand if space technology is imported but products such as electronic Bhagwat Gita, incense sticks, toothpicks are being imported from China. Ganapati idols, materials needed for pooja during Navaratri, Amul milk are coming from Gujarat. Can't the state produce 15 lakh litre of milk?

Mangoes cover 17% of the area in the state but their export is a mere 1%. Pakistan's exports are much more than that of Maharashtra's. So while working to achieve a $1-trillion economy, all these aspects are being considered.
We are proposing a number of things based on extensive studies.

We need to be ahead in industrial development. There needs to be a mechanism where a person can set up a business with just a few clicks.

Demand and supply principle will be followed wherein we will decide what is required and what is produced in the state. We need to know what all materials the state is producing. How much construction is being carried out, how much cement, steel, iron, and paint is required. What is produced locally and what is imported. How much of the imports can be done away with by manufacturing locally? For example, three crore eggs are consumed in the state daily. However, only one crore are produced here, while two crore come from other states. Can the egg production by farmers, self-help groups be promoted to bridge this gap?

We will set up vocational universities, create training facilities, further upgrade engineering colleges, and technical institutes.

Maharashtra's GSDP is Rs 31 lakh crore. In five years we have added Rs 10 lakh crore to the Rs 21 lakh crore. Rajasthan's GSDP, since its creation, is Rs 8 lakh crore.

However, a $1-trillion economy means we have to increase the GSDP to Rs 70 lakh crore. Whatever has been achieved in 60 years, more than that will have to be achieved in 59 months.

The state has to grow at a rate of 20% annually. Can we do it? Is there any example? First, we looked into the growth rate of all countries. There are small countries with a growth rate of 26% or 27%. A team of officers will be sent to such countries after the assembly elections. Second, economists will be roped in to help achieve this.

Third, the government will try to rope in the children of India's top businessmen to set up their businesses here. The government will ensure that there is no red-tapism and try to attract such young minds, who have studied abroad, to work here.

Are higher debt and fiscal deficit matters of serious concern as they give limited room for capital expenditure? How are you tackling the situation?

It will be improper to say that there is less capital investment in the state. In other states, budgetary provisioning is made so it looks that they have higher capital investment. We have CIDCO, MMRDA, MSRDC who make investments. The government has proposed to increase the metro network to 276 km from 11.6 km. The construction of Mumbai-Nagpur Samruddhi corridor, bridges, and coastal road is underway. The Metro rail network is being implemented in Nagpur, Pune, and Nashik.

In the water resources department, there has been no cut. In the first budget presented in March 2015 an allocation of Rs 7,272 crore was made for the department and it has now increased to Rs 12,500 crore.

Some say that the state is under a severe debt burden of Rs 4 lakh crore. In the past, the debt was 28.2% of the GSDP. There were violations of stipulated norms. However, the government has brought down the debt to 15% of the GSDP. Interest payment was 17% of the GSDP during previous governments, which has been reduced to 11%.

For the past two years, the budget has a revenue surplus. This despite the government having scrapped toll at several places.

The government also abolished the Local Body Tax which was called the 'Luto Bato tax' by PM Modi. The government waived LBT worth Rs 3,500 crore without waiting for GST.

At the time of providing relief to farmers, the government opened its purse without waiting for Centre's assistance. The government had sanctioned Rs 9,000 crore for drought relief, of which Rs 8,000 crore has been spent. After the recent floods, the state approved spending without waiting for the Centre to send funds.

We had reserved Rs 24,000 crore for crop loan waiver for 51 lakh farmers. So far, the government has spent Rs 21,000 crore. India alone has implemented a pay raise through the 7th Pay Commission, while other countries have cut wages. Maharashtra has to spend Rs 24,000 crore annually for the implementation of the 7th Pay Commission recommendations.

Despite these payouts, the state budget is revenue surplus. Last year, the government considered taking a loan of Rs 54,000 crore but ultimately took only Rs 11,000 crore. That was necessitated as the government's outgo towards interest payment is Rs 27,000 crore annually.

Our financial health is quite strong. However, some are criticising the government to win power and thereby hurting the state's pride.

What is the government doing for job creation? What are the parameters to check employment targets that the government looks to achieve?

We can check provident fund accounts to see if employment is increasing. It can also help to know if indirect employment has been created. And as such, a study of indirect employment shows that the number of provident fund accounts has increased.

The second thing is, while examining whether employment is rising, we also study industries and businesses. To measure their growth or decline, the increase or decrease in GST can be checked.

And the GST, in fact, has increased. In the country's GSDP, our contribution is 15%. We give the highest GST as compared to other states. If we take these contributions into account, employment has increased.

The third thing is that when the last budget was presented, the employment figures for ten months were given. Of the 79 lakh new jobs generated across India, 20 lakh were from Maharashtra, that is a commendable 25% share.

When there is an increase in GST, then I feel that people are not shutting down their industries, businesses, shops or liquidating fixed deposits to pay taxes. Whatever he has collected (as earnings), the tax will be paid from that.

No one will sell his home to pay tax. When tax is rising, it cannot be without employment.

Someone mentioned that an increased tax rate must have led to a higher tax collection. But the GST council reduced the rate of tax on 172 items from 28% to 18%. In the case of real estate, the rate was reduced from 12% to 5% and for affordable housing, from 8% to 1%.

However, I would also like to mention that our population is increasing and the employment rate should also increase in tandem. It is important for the government to boost employment as per the growing population. We are working on that issue in our efforts to achieve a trillion-dollar economy for the state.

Will the BJP ally with the Shiv Sena for the Maharashtra assembly elections?

It will not be appropriate on my part to comment as Shiv Sena president Uddhav Thackeray has said he will discuss this with BJP president Amit Shah and CM Fadnavis. However, the BJP and Shiv Sena have a common cause and have been in an alliance since 1990, barring the exception of 2014 assembly polls. There may be tension before polls, but it dies down later. This happened before the Lok Sabha elections, where we scotched rumours that the two parties won't contest polls together. We fought the Kalyan Dombivali civic polls separately but united again. During BMC elections, the Sena secured 84 seats and the BJP 82, but we joined hands and are working on projects like the coastal road. This alliance will not happen on the basis of the number of seats but on the basis of love. The Shiv Sainiks want Maharashtra to progress, which is what this Mahayuti government is doing. They don't want the state to regress because of our differences. Divisions between local rulers allowed the British and Mughals to conquer and rule India. A rift will only benefit the Congress-NCP and both parties know this. Uddhavji is large-hearted. He will sort out things with the chief minister and Amit bhai.

Recently, several Congress, NCP politicians have shifted to the Sena and BJP. Do you think it will create problems at the time of ticket distribution for assembly polls?

I will ask you a counter-question. BJP has over one crore member; when we allot tickets to 288 candidates for the assembly elections, do you think the rest of the members will be disappointed? Nowadays, there are ample opportunities for party workers apart from electoral politics, such as Jalyukta Shivar, our flagship scheme; Prime Minister Awas Yojana, Stand-up India, etc. Please understand that BJP was not in power for over five decades, we are not power-hungry. The party works on an ideology. Having said that, I do agree that injustice should not be done to other party workers when we import politicians from other parties. This is why Chief Minister Devendra Fadnavis has categorically said that BJP is a family and not a 'dharamshala'. Merits of people are analysed and only when we feel that their entry will benefit the party, do we admit them.

Currently, leaders from Vidarbha are leading the state. What work has been done for Vidarbha in the last five years?

The best educational facilities have been established with the Symbiosis University in Nagpur, an army school, and an IIT having been opened in Vidarbha. This is an area of abundant sun and rain but Vidarbha always got a raw deal when it comes to irrigation dues. In terms of irrigation, we have taken up many projects and built canals. The construction is on in full swing. I would like to thank Union Minister Nitin Gadkari as he has given Maharashtra a lot.

Recently, experts from the US visited the forest academy in Vidarbha and praised it generously. We have started working on bamboo processing to produce ethanol and are going to establish a bamboo board.

Besides, the allocation of budget to Mihan and Nandgaon-Khandeshwar MIDC was like Birbal's porridge which would never get cooked. Now, a lot of funds are getting allocated to the area. Nagpur has undergone a transformation in the past five years.

Then why does Vidarbha want to separate itself from the state?

It is not a question of leadership. Dr Babasaheb Ambedkar had advocated for small states. The reason was that small states can take swift decisions. And hence the state reorganisation commission had mentioned Vidarbha among the fifteen states it had proposed. The issue is not related to anyone's aspiration to become a minister or a chief minister. This is good for the development of the state. Decisions are faster and efficient. Hence, Ambedkar and the commission asked for a separate Vidarbha. We do not have the numbers right now to ask for a separate Vidarbha. When we have the numbers, we shall decide.

Agriculture is the weakest link in Maharashtra's economy, caught between the vagaries of weather and systemic issues

We are working on a few main points to strengthen agriculture and ensure that it moves from majboori (helplessness) to majbooti (strength). In 1970-71, the average size of landholdings in Maharashtra was 4.28 hectare per farmer, which dropped to 1.44 hectare per farmer according to the 2011 census. This further reduced to 1.34 hectare as was revealed during a study and review for the Shetkari Sanman Yojana cash transfers. The first biggest question before us is preserving soil health considering the diversification of crops on these small landholdings. We are also expanding irrigation and micro-irrigation to ensure more crop per drop of water. Second, we are ensuring proper supply of power with adequate infrastructure. Use of solar pumps will reduce the cost of production by doing away with the cost of electricity. In the very first year of our government in 2015, I increased the outlay for farm electrification from the previous paltry sums of Rs 105 crore and Rs 150 crore to Rs 1,039 crore. At the same time, the state electricity distribution utility was told to ensure quality supply of electricity to prevent infrastructure such as transformers being used as ornamentation.

The government is also working on providing market access to farmers through schemes such as farmers' markets and private markets, crop loans have been waived off and measures have been taken to ensure easy credit supply to agriculturists. In addition, crop insurance cover is being provided to them with new rules to ensure easier compensation for damages

Maharashtra has seen healthy growth in tiger population. But, concerns over protecting them from poisoning and poaching and ensuring their protection in areas outside wildlife sanctuaries and tiger projects remain

Maharashtra has done a good job in tiger protection and conservation, but kuchh to log kahenge. There are two types of people, tiger lovers, and tiger experts. Some tiger lovers react to the smallest of things, while tiger experts know that no tiger is immortal or destined to live forever. A tiger has a normal lifespan of 12 to 15 years. There are questions over how mortalities have risen over the years, but this biological turnover is natural with the growth in tiger population. As the tiger population increases, so will their deaths.

At present, Maharashtra has an estimated 312 adult tigers and around 250 sub-adults and cubs. However, it is necessary to take unnatural deaths seriously. At times, farmers electrify their farm fences to kill herbivores such as wild boars which destroy fields. However, this kills tigers too.

We have established the Special Tiger Protection Force (STPF) and considering the fact that conservation cannot be done by the forest staff alone, we have roped in villagers to assist. They will get employment and economic benefits. The areas between villages and forests will be fenced off to prevent conflict with animals. We are looking at increasing compensation for crop depredations to rates beyond the damage caused, which will mollify affected farmers.

However, we are facing another problem. The rise in tiger populations has led to infighting between tigers as they are territorial animals and mark an approximately 12-sqkm area. We had established a committee to study the relocation of tigers from congested landscapes to those which had lesser populations and a report has been sent to the National Tiger Conservation Authority (NTCA).

TRILLION DOLLAR DREAMS

Boost The GSDP	Observe & Learn	Retain Businessmen
Maharashtra’s GSDP is Rs 31 lakh crore. In five years we have added Rs 10 lakh crore to the Rs 21 lakh crore. Rajasthan’s GSDP, since its creation, is Rs 8 lakh crore. However, a $1-trillion economy means we have to increase the GSDP to Rs 70 lakh crore. Whatever has been achieved in 60 years, more than that will have to be achieved in 59 months	The state has to grow at a rate of 20% annually. Can we do it? Is there any example? First, we looked into the growth rate of all countries. There are small countries with a growth rate of 26% or 27%. A team of officers will be sent to such countries after the assembly elections. Second, economists will be roped in to help achieve this	Third, the government will try to rope in the children of India’s top businessmen to set up their businesses here. The government will ensure that there is no red-tapism and try to attract such young minds, who have studied abroad, to work here