MUMBAI: Maharashtra will soon form a state-owned non-bank finance company (NBFC) on the lines of Gujarat for better utilisation of funds stashed up in fixed deposits by state-owned corporations.
Around Rs 90,000 crore worth of deposits have been identified by the finance department.
“If this amount is put to proper use, it can ease out the burden on the state exchequer by at least Rs 2,250 crore,” state finance minister Sudhir Mungantiwar told the New Indian Express.
“Though the fiscal deficit of the state had been below 3 per cent in past 10 years barring a few exceptions, the accumulated loans have gone up to around Rs 3.5 lakh crore and interest on it amounts to around 13 per cent of the revenue. Hence our priority is to cut down on loans,” the minister said.
“By forming NBFC to manage in-house funds of state-owned entities, the funds of government entities will circulate within the ambit of state government. It will also ensure attractive returns on loans to state entities and availability of funds to other government entities at rates lower than that of the market,” he said.
Mungantiwar said that the company would be formed in the next few months. “I expect some resistance from the departments or the state-owned corporations who hold huge funds, but we will have to make them fall in line,” he added.
The idea of forming a finance company to manage state funds is not new, said the minister. The Gujarat government formed Gujarat State Financial Services Ltd (GSFS) way back in 1992. The company, which is registered with the RBI as a non-banking finance company, manages surplus funds of various state-controlled organisations and PSUs of the state. It acts as an in-house treasury manager to various state-owned entities.