New Delhi: The newly crowned Chief Minister of Uttar Pradesh has a herculean task ahead of him as the funds required to fulfill the promises made by the Samajwadi Party will need a lot of exercise. The empty coffers of the state have played a spoilsport for the Chief Minister.

However, Akhilesh Yadav has assured that this will not pose any hurdle in fulfilling the promises made to the people.

Though the government is yet to calculate the amount required for fulfilling its priorities, it is expected that the party would need Rs 20,000 crore for the purpose.

The government would require a whopping Rs 4,100 crore for distributing laptops, tablets and unemployment allowance to the youth. Even if it manages to fulfill the above promises, the SP would find it difficult to provide free power to the weavers apart from fulfilling other promises made to them.

On the other hand, the escalating fiscal deficit of the state is proving to be a headache for the party. The fiscal deficit was Rs 11,700 crore in 2008-09 which rose to Rs 17,247 crore in 2010-11.

The ousted BSP government had announced fiscal deficit at Rs 18,960 crore in its interim budget tabled in November last year which is most likely to go up in 2012-13.

Moreover, the Finance Commission has instructed the states to reduce their fiscal deficit by 2014-15 which will obviously lead to more financial pressure on the UP government.
Uttar Pradesh is facing debts to the tune of Rs 2,52,000 crore. As a result, the government is not in a position to undertake any major project on its own and the limited sources of income also fail to provide any hope in this regard.

The state earns Rs 50,000 crore from various sources with trade tax being the biggest contributor at Rs 26,500 crore. In addition, Rs 6,700 crore from excise tax, Rs 6,100 crore from stamp duty and Rs 1,700 crore from transport add to the state revenue.

Uttar Pradesh receives Rs 70,000 crore as grant from the Centre. However, the irony is that a large part of the amount is consumed on staff salaries, allowances, pensions and debt repayment. Therefore, there is a need for exploring additional avenues of income in the state. 

However, experts in the Finance Department suggest that if the government shelves some of its previous plans, realising its dreams would become a little easier. A significant share of the government’s exchequer is being spent on the social sector which calls for an urgent review.