The meet, which is usually scheduled late in the year to allocate funds for districts, was advanced to take stock of the financial position of the state, which is speculated to be `broke'.

"The members wanted to know the state's financial position before allocating resources for the districts," said a Mantralaya source.

The board met without chief minister Manohar ,Joshi who is also its chairman and finance minister M Shivankar, who is also planning minister of the state.

According to sources, such an untimely meet of the board which has Prakash Jawdekar, a BJP functionary as its vice-chairman, before the beginning of the plan process indicates the widening chasm between the Shiv Sena and BJP.

The members who had gathered under Jawdekar havesharply reacted to the absence of the chief minister and the finance minister and even went to the extent of proposing a resolution to boycott the meet in future if the two ministers failed to attend the meet. However, Jawedkar had to plead strongly against such a resolution.

What really came as a surprise were the sharp criticisms from chief secretary of state P Subramaniam and eminent economist D R Pendse. Subramaniam is reported to have said that the state must stop announcing new schemes every day. It will be difficult on the part of the government to pay the salary and bills of the contractors in future, he said reportedly.

Expressing utter dissatisfaction over the financial management of the state, Pendse said that the state is already in a debt trap as it is totally dependent on market borrowings to meet its revenue expenditure.

"If you make a plan for 1999-2000, every pie of it shall be from open market borrowings," said Pendse, adding that market borrowings should not be utilised forunproductive purposes.

The financial position of the state in the current year is far from satisfactory. With a negative balance of current revenue amounting to Rs 15,000 crore, the state has approved a plan of Rs 11,600 crore by relying heavily on open market borrowings which are pegged at Rs 5,200 crore this year.

However, on the basis of consultations with top industrialists, Subramaniam said that the goverment can at the most raise Rs 2,500 crore. The state already has a debt burden of Rs 27,000 crore over a period of time.

It was pointed out that the state is borrowing too heavily to even meet the interest expenses. The state has already provided for Rs 5,000 crore during the year out of the Rs 14,000 crore required for paying the state government employees on the basis of the recommendation of the fifth Pay Commission.

The government wants that the balance Rs 9,000 crore be deposited in the general provident fund over a period of three years. The state needs another Rs 1,000 crore as interestpayment as the money has to deposited at a 12 per cent interest rate.

However, the government will find it difficult to implement it as employees' unions and Planning Commission are against the plan to credit the unpaid amount to the provident fund.

Sources in the planning board felt that the state government was yet to firm up a plan to mobilise the resources needed to pay employees' salaries, less to speak of the funds needed for next year's planning. The state government's estimated revenue income during 1997-98 is pegged at Rs 23,000 crore while the expenditure is estimated at Rs 28,000 crore, thereby leaving deficit of Rs 5,000 crore.

Failure to find plausible means to gather Rs 5,000 crore of deficit during the current year along with another Rs 10,000 crore for paying employees' salary in the short run only strengthens the speculation that the state is heading for a major financial breakdown, the members felt.