Working on broad agri reforms; may mull one-time settlement of farm loans: Maha FM

By our estimates, around 2.6 crore people in the state work in the agriculture and allied sectors. Of these, 1.37 crore people can be classified as pure farmers. Around 1.07 crore farmers hold five hectares and less, and within this, around 67 lakh farmers hold 2.5 hectares and less. In 1970-71, the average land holding per farmer was 4.28 hectares. That has now shrunk to 1.44 hectares.

To boost yield, farmers increasingly resort to use of chemicals, which starts showing negative results after a couple of years. The government is trying to help farmers with irrigation schemes, better quality seeds, electricity, access to credit, and laws to help them market their produce better.

These structural reforms will help farmers in the long run. We are trying to encourage community farming. We have told them that if a minimum of 20 farmers—maximum, unlimited—with a minimum of 100 hectares between them—maximum, unlimited—come to us, we will provide all possible support by way of paani, bijli, sadak (water, power, road), cold storage, and marketing.

Some of the measures are already showing results. Agricultural growth was -17.5 percent two years ago. It has now increased to 19.3 percent. Our farmers should be able to double their income by 2021, which is ahead of the central government target of 2022 to double farm income.

Outside of farming, we are also looking to encourage fishing, poultry and livestock farming sectors. We have made necessary provisions for that in this year’s Budget.

Are you working on a time-line for farm loan waiver?

We need to do a detailed study and see how it can best help the maximum number of farmers. If there is some one-time settlement that can be worked out with the banks, we will consider that also.

Banks do that for their big customers, so why not for farmers. In 2009, the UPA government waived loans for farmers and eight years later, many farmers are deep in debt. Waivers alone cannot be the solution; we have to make farmers self-reliant.

The debt on your books has now risen to more than Rs 4 lakh crore. Is it manageable?

You need to see it as a percentage of GSDP (gross state domestic produce). So debt as a proportion of GSDP has actually fallen to 15.5 percent from 16.7 percent. We have been prudent in our borrowings. We are looking at ways to raise the share of non-tax revenues.

We will be refinancing some of the high-cost debts. We will use direct benefits transfer to plug leakage of government spend. Within the government itself, we have been reviewed systems and processes to cut down wasteful expenses.

Last year, we saved around Rs 3000 crore through cost-cutting measures alone. We will be looking to monetize idle land parcels, and hike lease rentals. In central Mumbai, there are places which have been given out on lease for as low as Rs 1 a month, and which charge Rs 25 lakh to host a marriage.

The government is getting nothing out of it. Also, the penalties for law violations are quite low. We will hike that substantially, so that it generates revenue as well as acts as a deterrent. If a man pays such hefty fines more than once, he will automatically become a fine man.

Are you planning to divest stakes in companies like MOIL, Mahanagar Gas in which you hold shares?

As of now, there is no plan to divest any stake in these companies.
The Goods and Service Tax is in its final stages of becoming a reality.

The Goods and Service Tax is in its final stages of becoming a reality. Since Maharashtra is a manufacturing state, do you see drawbacks from outweighing benefits?

At a net level, GST will be beneficial for Maharashtra. Also, the states are being compensated for any revenue loss they will suffer for the next five years. Most importantly, one nation one tax will be beneficial for states like ours. Many companies were issuing bills in other states with lower value added tax. That will stop. Also, other states were giving tax incentives to attract companies set up plants there. That too will end.

And, Maharashtra is a consuming state as well since we account for nearly a fifth of the service tax collected across the country.

Will the Supreme Court ban on liquor outlets near national and state highways have a big impact on your revenues?

I got a note from the excise department saying that the state could lose around Rs 700 crore as a result of the move. I am not so sure. Just because there is a ban, it does not mean that people will stop consuming liquor. They will go to the places which serve them, even if it means burning extra petrol or diesel to get there.

Maharashtra has slipped two places to number 10 this year in the national Business Action Reform Plan (BARP) index. What are you doing to improve the ease of doing business in the state?

That is an ongoing process. We have already reduced the number of approvals required from 68 to 24, and we will continue to reduce it to the extent possible.