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Devil's Advocate: Vilasrao Deshmukh
Published on Sun, Apr 30, 2006 at 20:40, Updated on Sun, Apr 30, 2006 at 21:43 in 
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Maharashtra used to be considered the engine of India's development. Today, the state is drowning in debt, its farmers committing suicide and its children dying of malnutrition. What's gone wrong? That is the critical question that Karan Thapar shall put forward in an exclusive interview with the Chief Minister of Maharashtra Vilasrao Deshmukh.
Karan Thapar:Hello and welcome to Devil's Advocate. Mr Deshmukh, let's start with the big picture. Maharashtra was considered the engine of India's development. Today your state is drowning in debt and in almost every respect Gujarat has gone ahead, is this proof of misrule?
Vilasrao Deshmukh: No, I don't agree with this. Maharashtra has always been number one. And if you go by the latest CII survey, Maharashtra still continues to be at the number one spot.
Karan Thapar:Let's look at that debt situation that confronts you. According to the CAG, Maharashtra’s debt is 2000-01 was Rs 63, 000 crore. In 2004-05, its doubled to a Rs 121,000 crore and now, your own Finance Minister is hinting that next year it could increase by perhaps as much as 33 per cent more, that is a terrible situation.
Vilasrao Deshmukh: The point is that if you see a state like Maharashtra, our potential is such that we can carry on this kind of a burden. But for the development, I think any load on any state government, I think that this is not a reason to be worried about.
Karan Thapar:But the reason people are worried is because today your liabilities are three times your revenue. How can that continue?
Vilasrao Deshmukh: We have to increase our revenue side and we are mobilising many resources and as VAT has now come into play, things are improving.
Karan Thapar:But far from increasing your revenue side, infact the slide is getting worse and worse. In the early 1990s, Maharashtra was considered to be amongst the top 14 states, the lowest in terms of its fiscal deficit, the second lowest in terms of its revenue deficit. The situation has eroded completely from there.
Vilasrao Deshmukh: The point is that it has a history. You must go back to the government run by the Shiv Sena and the BJP in 1995 and since then, this thing started.
Karan Thapar:You mean, the rot started with the Shiv Sena?
Vilasrao Deshmukh: Yeah, because they started borrowing the loans.
Karan Thapar:But Shiv Sena was succeeded by you. We have had the Congress government for five years and you have been the Chief Minister for almost three of them.
Vilasrao Deshmukh: I do admit that, but once they began incurring a lot of loans from the market and then they started the schemes, we had to fall in the same deathtrap.
Karan Thapar:Chief Minister, you are blaming your opponents, that is an easy and convenient thing to do. The problem is that your debt hasn't actually fuelled growth. Maharashtra's growth during the 85-95 period, before the Shiv Sena came to power, was 7.5 per cent on an average a year. Since 95, the average is 4.5 a year, it has collapsed.
Vilasrao Deshmukh: It was there earlier, but now, for the past three years, the growth rate of Maharashtra is above 9 per cent.
Karan Thapar:Let's just look at the comparison of Maharashtra with Gujarat and in every single particular, your state is performing less well. Since the mid-1990s, your per capita income is growing at 3 per cent, Gujarat is growing at 5 per cent; your state GDP is growing at 5 per cent, Gujarat is growing at 7 per cent; your industry is growing at 4 per cent, Gujarat is growing at 7 per cent. In almost every respect, Gujarat is doing better than you.
Vilasrao Deshmukh: During 1995 and 1999, the things had deteriorated and because of that gap, we had to fall in that same dead trap.
Karan Thapar:You have had six years of Congress government, you have had three or four years of government under your personal leadership, the reversal is not obvious to anyone.
Vilasrao Deshmukh: One must understand that I am riding a coalition government and a coalition government has its own limitations and its own complications.
Karan Thapar:Is that a problem?
Vilasrao Deshmukh: Yes, this is a problem because so far as finance and disciplines are concerned, we have to take some hard decisions. And when we run a coalition government, it is very difficult to take hard decisions.
Karan Thapar:So, you are saying that the coalition allies that you have will not let you take hard decisions.
Vilasrao Deshmukh: It is very difficult, as I said.
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