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If Mumbai is to retain the tag of the financial capital of India we will need to focus on promoting innovation and technology within the traditional banking, insurance and securities practices’, says Dinesh Kumar Jain, Additional Chief Secretary (Finance), Government of Maharashtra, in an interview with Rakesh Roy of Elets News Network (ENN). Excerpts:

“Though the farmers’ loan waiver scheme will put some pressure on our finances, the welfare of farmers is of paramount importance to our Government.”

With Maharashtra known as a leading State in the country in terms of agriculture and industry, what plans does the Finance Department have to take the State to new heights? Maharashtra has grown strongly in last couple of years, thanks to the government’s push to agriculture and infrastructure sector. We have already given great impetus to improve the infrastructure, promote ease of doing business, introduced a digital framework for seamless business activities and called upon global companies to take advantage of the opportunities available in the State. This is reflected in the FDI numbers. The State has attracted more than half of the total (53 per cent) foreign direct investment (FDI) in the country last fiscal.

We are also taking up huge capital investments. Apart from the Mumbai Metro project, we have tied up loans for Pune and Nagpur metro projects with contribution from the Central Government. Additionally, we have also tied up loose ends so far as fund availability for Mumbai Trans Harbour Link (MTHL) project is concerned. To increase agriculture productivity, the department has taken a loan for Rs 12,000 crore from NABARD for irrigation projects along with many other agriculture projects like ‘JalyuktShivar’. The push to agri, industry and infra will increase the growth momentum of the State and generate huge employment opportunities. According to a recent FICCI studies, these initiatives can take help Maharashtra to become a $ 1 trillion economy by 2025.

How do you perceive the State government’s plan to revive the ailing District Cooperative Central (DCC) banks in the State, while the farmers and rural people of the State mainly depend upon these banks for loans and banking services, etc?

The State government is considering a package for infusing funds for the weak DCC banks. In addition, consolidation of Primary Agricultural Societies (PACs) is on the anvil. We are joining hands with the Central Government in computerising operations of PACs in phases.

The State government has waived off farmers’ loans substantially and is planning to give more financial assistance in coming days, how will the incentive affect the State revenue and State’s financial status?

Though the farmers’ loan waiver scheme will put some pressure on our finances, the welfare of the farmers is of paramount importance to our Government. To take care of the pressure on our finances, we already have announced measures to reduce avoidable revenue expenditure which is indirectly saving for the Government across departments. For this, we have streamlined our processes for flow of funds to beneficiaries by making it mandatory to transfer funds directly into Aadhaar linked bank accounts of the eligible beneficiaries. Also, for paying some portion of the loan waiver we are forming a society which will take deposits of the excess cash lying with the PSUs/ Authorities/ Local Bodies for which they will be paid an interest. The department is also working towards additional resource mobilisation throughmore effective collection of State excise, Road Tax and other revenue receipts such as Stamp Duty etc. GST collection of Rs 6,100 crore in July 2017 is also a positive signal for the treasury. We except GST collections to remain strong in the coming months.

What are the future plans of the government for the Banking and Finance sector of Mumbai which is likely to be transformed a lot in the coming days?

Bill Gates recently said “We need banking but we don’t need banks anymore”. Thus, to bring more and more people under the ambit of the financial system, technology will play a major role. And if we want to retain the tag of the financial capital of India we will need to focus on promoting innovation and technology within the traditional banking, insurance and securities practices. We not only want Mumbai to remain the financial capital of the country, but become a leading global financial hub like London, Hong Kong and Singapore. The Government has already created a committee under the leadership of our Hon’ble Chief Minister which will work towards creating an ecosystem for making the Mumbai Metropolitan Region a global fintech hub. The MMRDA has already sought from the Centre a finance Special Economic Zone (SEZ) tag for the 50.31 hectares of land at Bandra-Kurla Complex that has been cleared for the International Financial Services Centre (IFSC).

How has the implementation of GST – called one nation, one market, one tax – transformed the finance sector at large?

Maharashtra is on the top positions among other States in the country when it comes to migration of existing traders and fresh registrations under the Goods and Service Tax (GST) network. Out of the total 9.16 lakh existing taxpaying traders in Maharashtra who had registered themselves under central excise, service tax and value added tax (VAT), over 8 lakh taxpayers have transitioned into the new tax regime. This tax reform will boost the economy once the near term hiccups are over. Also huge shift will be seen from unorganised to organised sector. A turn around in the economy and industry will help the banks to reduce NPA and improve credit growth.

What other plans your department has to raise funds for the various development works of the State?

The government is working with various multilateral and bilateral funding agencies like the World Bank, JICA for raising funds for various infrastructure projects like Metro, MTHL, and Mumbai Nagpur expressway. Additionally, we are in the process to setup a separate SPV namely MAHAINFRA for funding of projects in the State. This institute is proposed to act as a single window for aggregating the land held by various departments for securitisation, which are neither in use and nor are expected to be developed by the holding department for next 10 years. The land will be escrowed to the SPV for generation of funds. Securitisation of the land will aid in raising funds through low cost loans/ bonds/ investments from large investors with long term horizons like national or international pension and insurance funds. The Government will also recruit a team subject experts from varied fields for increasing the efficiency of the institution.

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